Problem 21-6A (Part Level Submission) Krause Industries balance sheet at December 31, 2016, is presented below. KRAUSE INDUSTRIES Balance Sheet December 31, 2016 Assets Current Assets Cash $7,500 Accounts receivable 73,500 Finished goods inventory (1,500 units) 26,090 Total current assets 107,090 Property, Plant, and Equipment Equipment $40,520 Less: Accumulated depreciation 10,470 30,050 Total assets $137,140 Liabilities and Stockholders' Equity Liabilities Notes payable $27,210 Accounts payable 47,580 Total liabilities 74,790 Stockholders' Equity Common stock $37,330 Retained earnings 25,020 Total stockholders' equity 62,350 Total liabilities and stockholders' equity $137,140 Budgeted data for the year 2017 include the following. 2017 Quarter 4 Total Sales budget (8,000 units at $32) $76,800 $256,000 Direct materials used 14,840 62,500 Direct labor 12,500 50,900 Manufacturing overhead applied 10,000 50,110 Selling and administrative expenses 16,590 75,000 To meet sales requirements and to have 2,500 units of finished goods on hand at December 31, 2017, the production budget shows 9,000 required units of output. The total unit cost of production is expected to be $18. Krause uses the first-in, first-out (FIFO) inventory costing method. Interest expense is expected to be $3,500 for the year. Income taxes are expected to be 40% of income before income taxes. In 2017, the company expects to declare and pay an $9,510 cash dividend. The companys cash budget shows an expected cash balance of $5,880 at December 31, 2017. All sales and purchases are on account. It is expected that 60% of quarterly sales are collected in cash within the quarter and the remainder is collected in the following quarter. Direct materials purchased from suppliers are paid 50% in the quarter incurred and the remainder in the following quarter. Purchases in the fourth quarter were the same as the materials used. In 2017, the company expects to purchase additional equipment costing $11,530. $9,350 of depreciation expense on equipment is included in the budget data and split equally between manufacturing overhead and selling and administrative expenses. Krause expects to pay $9,010 on the outstanding notes payable balance plus all interest due and payable to December 31 (included in interest expense $3,500, above). Accounts payable at December 31, 2017, includes amounts due suppliers (see above) plus other accounts payable of $9,760. Unpaid income taxes at December 31 will be $5,870. Prepare a budgeted statement of cost of goods sold. KRAUSE INDUSTRIES Budgeted Cost of Goods Sold Entry field with correct answer For the Quarter Ending December 31, 2017For the Year Ending December 31, 2017December 31, 2017 Entry field with correct answer Manufacturing Overhead AppliedFinished Goods Inventory, 1/1/17Finished Goods Inventory, 12/31/17Cost of Goods SoldIncome Tax ExpenseDirect Materials UsedCost of Goods ManufacturedSelling and Administrative ExpensesInterest ExpenseDirect LaborNet Income / (Loss)SalesCost of Goods Available For Sale $ Entry field with correct answer Entry field with correct answer Manufacturing Overhead AppliedSelling and Administrative ExpensesFinished Goods Inventory, 12/31/17SalesCost of Goods Available For SaleCost of Goods SoldFinished Goods Inventory, 1/1/17Income Tax ExpenseDirect Materials UsedCost of Goods ManufacturedInterest ExpenseDirect LaborNet Income / (Loss) Entry field with correct answer Cost of Goods Available For Sale Cost of Goods Manufactured Cost of Goods Sold Finished Goods Inventory, 12/31/17 Finished Goods Inventory, 1/1/17 Direct Materials Used Direct Labor Manufacturing Overhead Applied Income Tax Expense Interest Expense Net Income / (Loss) Sales Selling and Administrative Expenses $ Entry field with correct answer Entry field with correct answer Direct Labor Interest Expense Net Income / (Loss) Sales Selling and Administrative Expenses Cost of Goods Available For Sale Manufacturing Overhead Applied Income Tax Expense Cost of Goods Manufactured Cost of Goods Sold Finished Goods Inventory, 12/31/17 Finished Goods Inventory, 1/1/17 Direct Materials Used Entry field with correct answer Entry field with correct answer Manufacturing Overhead Applied Interest Expense Direct Labor Finished Goods Inventory, 12/31/17 Income Tax Expense Finished Goods Inventory, 1/1/17 Net Income / (Loss) Direct Materials Used Sales Selling and Administrative Expenses Cost of Goods Available For Sale Cost of Goods Manufactured Cost of Goods Sold Entry field with correct answer Entry field with correct answer Entry field with correct answer Cost of Goods Available For SaleSalesNet Income / (Loss)Selling and Administrative ExpensesFinished Goods Inventory, 12/31/17Cost of Goods ManufacturedCost of Goods SoldDirect Materials UsedFinished Goods Inventory, 1/1/17Direct LaborManufacturing Overhead AppliedIncome Tax ExpenseInterest Expense Entry field with correct answer Entry field with correct answer SalesSelling and Administrative ExpensesManufacturing Overhead AppliedDirect LaborFinished Goods Inventory, 1/1/17Income Tax ExpenseCost of Goods Available For SaleCost of Goods ManufacturedInterest ExpenseNet Income / (Loss)Cost of Goods SoldFinished Goods Inventory, 12/31/17Direct Materials Used Entry field with correct answer Entry field with correct answer Income Tax ExpenseCost of Goods Available For SaleCost of Goods ManufacturedCost of Goods SoldFinished Goods Inventory, 12/31/17Finished Goods Inventory, 1/1/17Interest ExpenseDirect Materials UsedDirect LaborManufacturing Overhead AppliedNet Income / (Loss)SalesSelling and Administrative Expenses $ Entry field with correct answer Prepare a budgeted multiple-step income statement for 2017. KRAUSE INDUSTRIES Budgeted Income Statement For the Year Ending December 31, 2017December 31, 2017For the Quarter Ending December 31, 2017 Cost of Goods ManufacturedIncome from OperationsGross ProfitIncome Tax ExpenseFinished Goods Inventory, 1/1/17Finished Goods Inventory, 12/31/17Interest ExpenseIncome before Income TaxesNet Income / (Loss)Sales RevenueSelling and Administrative ExpensesCost of Goods Available For SaleCost of Goods Sold $ Finished Goods Inventory, 1/1/17Gross ProfitFinished Goods Inventory, 12/31/17Income before Income TaxesIncome from OperationsSales RevenueIncome Tax ExpenseSelling and Administrative ExpensesInterest ExpenseCost of Goods Available For SaleCost of Goods SoldCost of Goods ManufacturedNet Income / (Loss) Income before Income TaxesSales RevenueIncome from OperationsCost of Goods Available For SaleIncome Tax ExpenseSelling and Administrative ExpensesInterest ExpenseNet Income / (Loss)Cost of Goods ManufacturedCost of Goods SoldGross ProfitFinished Goods Inventory, 12/31/17Finished Goods Inventory, 1/1/17 Interest ExpenseIncome from OperationsNet Income / (Loss)Finished Goods Inventory, 12/31/17Gross ProfitSales RevenueFinished Goods Inventory, 1/1/17Income before Income TaxesSelling and Administrative ExpensesCost of Goods Available For SaleIncome Tax ExpenseCost of Goods ManufacturedCost of Goods Sold Gross ProfitIncome before Income TaxesIncome from OperationsSelling and Administrative ExpensesCost of Goods SoldNet Income / (Loss)Finished Goods Inventory, 12/31/17Income Tax ExpenseCost of Goods ManufacturedFinished Goods Inventory, 1/1/17Cost of Goods Available For SaleInterest ExpenseSales Revenue Interest ExpenseSelling and Administrative ExpensesFinished Goods Inventory, 12/31/17Gross ProfitFinished Goods Inventory, 1/1/17Cost of Goods Available For SaleIncome before Income TaxesSales RevenueCost of Goods ManufacturedCost of Goods SoldIncome from OperationsIncome Tax ExpenseNet Income / (Loss) Net Income / (Loss)Interest ExpenseCost of Goods Available For SaleCost of Goods SoldSelling and Administrative ExpensesIncome from OperationsGross ProfitIncome before Income TaxesFinished Goods Inventory, 12/31/17Sales RevenueIncome Tax ExpenseCost of Goods ManufacturedFinished Goods Inventory, 1/1/17 Finished Goods Inventory, 1/1/17Interest ExpenseIncome from OperationsNet Income / (Loss)Cost of Goods Available For SaleIncome Tax ExpenseIncome before Income TaxesSales RevenueGross ProfitSelling and Administrative ExpensesCost of Goods ManufacturedCost of Goods SoldFinished Goods Inventory, 12/31/17 Cost of Goods SoldIncome from OperationsFinished Goods Inventory, 1/1/17Selling and Administrative ExpensesGross ProfitCost of Goods Available For SaleIncome before Income TaxesIncome Tax ExpenseFinished Goods Inventory, 12/31/17Sales RevenueInterest ExpenseCost of Goods ManufacturedNet Income / (Loss) $