Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Problem 9-6A (Part Level Submission) Krause Industries balance sheet at December 31, 2013, is presented below. KRAUSE INDUSTRIES Balance Sheet December 31, 2013 Assets Current

Problem 9-6A (Part Level Submission)

Krause Industries balance sheet at December 31, 2013, is presented below.

KRAUSE INDUSTRIES Balance Sheet December 31, 2013

Assets

Current Assets

Cash

$7,500

Accounts receivable

82,500

Finished goods inventory (2,000 units)

33,740

Total current assets

$123,740

Property, Plant, and Equipment

Equipment

$41,870

Less: Accumulated depreciation

11,870

30,000

Total assets

$153,740

Liabilities and Stockholders' Equity

Liabilities

Notes payable

$26,870

Accounts payable

46,870

Total liabilities

73,740

Stockholders' Equity

Common stock

$48,130

Retained earnings

31,870

Total stockholders' equity

80,000

Total liabilities and stockholders' equity

$153,740

Additional information accumulated for the budgeting process is as follows. Budgeted data for the year 2014 include the following.

4th Qtr. of 2014

Year 2014 Total

Sales budget (8,000 units at $35) $84,000 $280,000
Direct materials used 13,260 69,400
Direct labor 12,500 56,600
Manufacturing overhead applied 10,000 52,130
Selling and administrative expenses 16,130 76,000

To meet sales requirements and to have 3,000 units of finished goods on hand at December 31, 2014, the production budget shows 9,000 required units of output. The total unit cost of production is expected to be $20. Krause Industries uses the first-in, first-out (FIFO) inventory costing method. Selling and administrative expenses include $12,042 for depreciation on equipment. Interest expense is expected to be $3,500 for the year. Income taxes are expected to be 40% of income before income taxes. 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 2014, the company expects to purchase additional equipment costing $20,870. It expects to pay $9,870 on notes payable plus all interest due and payable to December 31 (included in interest expense $3,500, above). Accounts payable at December 31, 2014, include amounts due suppliers (see above) plus other accounts payable of $7,570. In 2014, the company expects to declare and pay an $6,870 cash dividend. Unpaid income taxes at December 31 will be $6,870. The companys cash budget shows an expected cash balance of $7,950 at December 31, 2014.

image text in transcribed

please prepare a balance sheet

image text in transcribed

image text in transcribed

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Accounting questions

Question

What is Accounting?

Answered: 1 week ago

Question

Define organisation chart

Answered: 1 week ago

Question

What are the advantages of planning ?

Answered: 1 week ago