Question 4 of 4 Wiew Policies Show Attempt History Current Attempt in Progress Krause Industries' balance sheet at December 31, 2019, is presented below. $7,500 73,500 26,160 107,160 KRAUSE INDUSTRIES Balance Sheet December 31, 2019 Assets Current Assets Cash Accounts receivable Finished goods inventory (1,500 units) Total current assets Property, Plant, and Equipment Equipment $40,670 Less: Accumulated depreciation 10.310 Total assets Liabilities and Stockholders' Equity Liabilities Notes payable Accounts payable Total liabilities Stockholders' Equity Common stock $37.970 Retained earnings 27,410 Total stockholders' equity Total liabilities and stockholders' equity 30,360 $137.520 $25.170 46,970 72,140 65,380 $137,520 99. 0.63/2.5 III 27,410 Retained earnings Total stockholders' equity Total liabilities and stockholders' equity 65,380 $137.520 Budgeted data for the year 2020 include the following. Sales budget (8,000 units at $32) Direct materials used Direct labor Manufacturing overhead applied Selling and administrative expenses 2020 Quarter 4 Total $76,800 $256,000 14,990 62,500 12,500 50,900 10.000 48,600 16,360 75.000 To meet sales requirements and to have 2,500 units of finished goods on hand at December 31, 2020, 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 2020, the company expects to declare and pay an $8,450 cash dividend. The company's cash budget shows an expected cash balance of $5,880 at December 31, 2020. 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 2020, the company expects to purchase additional equipment costing $11,120.58,461 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 $8,700 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, 2020, includes amounts due suppliers (see above) plus other accounts payable relating to manufacturing overhead of $7.410. Unpaid income taxes at December 31 will be $5.710. Ilustatement of cost of goods sold. KRAUSE INDUSTRIES Budgeted Cost of Goods Sold For the Year Ending December 31, 2020 Finished Goods Inventory, 1/1/20 $ 26160 Cost of Goods Manufactured Direct Materials Used 62500 Direct Labor 50900 Manufacturing Overhead Applied 48600 162000 Cost of Goods Available For Sale 188160 Finished Goods Inventory, 12/31/20 45000 i Cost of Goods Sold $ 143160 e Textbook and Media Attempts: 1 of 5 used (b) Question 4 of 4 0.63/2.5 Prepare a budgeted multiple-step income statement for 2020. KRAUSE INDUSTRIES Budgeted Income Statement