Requirement 2. Prepare Giseppe's annual financial budget for 2019, including budgeted income statement, budgeted balance sheet, and budgeted statement of cash flows. Begin with the budgeted income statement. (Complete all input fields. Enter a "0" for any zero balances.) Review the sales budget you prepared above. Review the cost of goods sold budget you prepared above. Review the selling and administrative expense budget you prepared above. Review the cash budget you prepared above. Giseppe Tire Company Budgeted Income Statement For the Year Ended December 31, 2019 Sales Revenue Cost of Goods Sold Gross Profit Selling and Administrative Expenses Operating Income Interest Expense Income before Income Taxes Income Tax Expense TIT Net Income Data Table December 31, 2018 Assets Current Assets: Cash $ 63,000 Accounts Receivable 45,000 Raw Materials Inventory 3,300 10,500 Finished Goods Inventory Total Current Assets $ 121,800 Property, Plant, and Equipment: Equipment 168,000 (106,000) Less: Accumulated Depreciation 62,000 183,800 Total Assets Liabilities Current Liabilities: Accounts Payable $ 9,000 Stockholders' Equity Common Stock, no par $ 170,000 Retained Earnings 4,800 Total Stockholders' Equity 174,800 $ 183,800 Total Liabilities and Stockholders' Equity Print Done - X More Info a. e. (Unless otherwise noted, assume all of the following events occurred during 2018 and that any balances given are stated as of December 31, 2018.) Budgeted sales are 1,100 tires for the first quarter and expected to increase by 200 tires per quarter. Cash sales are expected to be 20% of total sales, with the remaining 80% of sales on account. b. Finished Goods Inventory on December 31, 2018 consists of 300 tires at $35 each. Desired ending Finished Goods Inventory is 50% of the next quarter's sales; first quarter sales for 2020 are expected be 1,900 C. tires. FIFO inventory costing method is used. d. Raw Materials Inventory on December 31, 2018, consists of 600 pounds of rubber compound used to manufacture the tires. Direct materials requirements are 2 pounds of a rubber compound per tire. The cost of the compound is $5.50 per pound. Desired ending Raw Materials Inventory is 40% of the next quarter's direct materials needed for production; desired ending f. inventory for December 31, 2019 is 600 pounds; indirect materials are insignificant and not considered for budgeting purposes. 9. Each tire requires 0.60 hours of direct labor, direct labor costs average $20 per hour. h. Variable manufacturing overhead is $5 per tire. Fixed manufacturing overhead includes $2,500 per quarter in depreciation and $22,500 per quarter for other costs, such as utilities, i. insurance, and property taxes. Fixed selling and administrative expenses include $9,000 per quarter for salaries; $1,500 per quarter for rent: $1,650 per quarter i. for insurance; and $1,000 per quarter for depreciation. k. Variable selling and administrative expenses include supplies at 2% of sales. 1. Capital expenditures include $50,000 for new manufacturing equipment, to be purchased and paid in the first quarter. Cash receipts for sales on account are 70% in the quarter of the sale and 30% in the quarter following the sale; December 31, 2018, Accounts Receivable is received in the first quarter of 2019; uncollectible accounts are considered insignificant and not m. considered for budgeting purposes. Direct materials purchases are paid 60% in the quarter purchased and 40% in the following quarter; December 31, 2018, Accounts n. Payable is paid in the first quarter of 2019. 0. Direct labor, manufacturing overhead, and selling and administrative costs are paid in the quarter incurred. Income tax expense is projected at $3,500 per quarter and is paid in the quarter incurred. Cicono dacice to maintain a minimum och balance of 60 000 and bacown from the local banke nooded in inanamante of p. More Info C. d. e i. b. Finished Goods Inventory on December 31, 2018 consists of 300 tires at $35 each. Desired ending Finished Goods Inventory is 50% of the next quarter's sales; first quarter sales for 2020 are expected be 1,900 tires. FIFO inventory costing method is used. Raw Materials Inventory on December 31, 2018, consists of 600 pounds of rubber compound used to manufacture the tires, Direct materials requirements are 2 pounds of a rubber compound per tire. The cost of the compound is $5.50 per pound. Desired ending Raw Materials Inventory is 40% of the next quarter's direct materials needed for production; desired ending f. inventory for December 31, 2019 is 600 pounds; indirect materials are insignificant and not considered for budgeting purposes. g. Each tire requires 0.60 hours of direct labor; direct labor costs average $20 per hour. h. Variable manufacturing overhead is $5 per tire. Fixed manufacturing overhead includes $2,500 per quarter in depreciation and $22,500 per quarter for other costs, such as utilities, insurance, and property taxes. Fixed selling and administrative expenses include $9,000 per quarter for salaries: $1,500 per quarter for rent: $1,650 per quarter 1. for insurance; and $1,000 per quarter for depreciation. Variable selling and administrative expenses include supplies at 2% of sales. I. Capital expenditures include $50,000 for new manufacturing equipment, to be purchased and paid in the first quarter. Cash receipts for sales on account are 70% in the quarter of the sale and 30% in the quarter following the sale; December 31, 2018, Accounts Receivable is received in the first quarter of 2019; uncollectible accounts are considered insignificant and not m. considered for budgeting purposes. Direct materials purchases are paid 60% in the quarter purchased and 40% in the following quarter, December 31, 2018, Accounts n. Payable is paid in the first quarter of 2019, Direct labor, manufacturing overhead, and selling and administrative costs are paid in the quarter incurred. P. Income tax expense projected at $3,500 per quarter and is paid in the quarter incurred. Giseppe desires to maintain a minimum cash balance of $60,000 and borrows from the local bank as needed in increments of $1,000 at the beginning of the quarter, principal repayments are made at the beginning of the quarter when excess funds are available and in increments of $1,000; interest is 12% per year and paid at the beginning of the quarter based on the amount 9. outstanding from the previous quarter. k. 0. Requirements 1. Prepare Giseppe's operating budget and cash budget for 2019 by quarter. Required schedules and budgets include: sales budget, production budget, direct materials budget, direct labor budget, manufacturing overhead budget, cost of goods sold budget, selling and administrative expense budget, schedule of cash receipts, schedule of cash payments, and cash budget. Manufacturing overhead costs are allocated based on direct labor hours. Round all calculations to the nearest dollar. 2. Prepare Giseppe's annual financial budget for 2019, including budgeted income statement and budgeted balance sheet. Print Done Requirement 2. Prepare Giseppe's annual financial budget for 2019, including budgeted income statement, budgeted balance sheet, and budgeted statement of cash flows. Begin with the budgeted income statement. (Complete all input fields. Enter a "0" for any zero balances.) Review the sales budget you prepared above. Review the cost of goods sold budget you prepared above. Review the selling and administrative expense budget you prepared above. Review the cash budget you prepared above. Giseppe Tire Company Budgeted Income Statement For the Year Ended December 31, 2019 Sales Revenue Cost of Goods Sold Gross Profit Selling and Administrative Expenses Operating Income Interest Expense Income before Income Taxes Income Tax Expense TIT Net Income Data Table December 31, 2018 Assets Current Assets: Cash $ 63,000 Accounts Receivable 45,000 Raw Materials Inventory 3,300 10,500 Finished Goods Inventory Total Current Assets $ 121,800 Property, Plant, and Equipment: Equipment 168,000 (106,000) Less: Accumulated Depreciation 62,000 183,800 Total Assets Liabilities Current Liabilities: Accounts Payable $ 9,000 Stockholders' Equity Common Stock, no par $ 170,000 Retained Earnings 4,800 Total Stockholders' Equity 174,800 $ 183,800 Total Liabilities and Stockholders' Equity Print Done - X More Info a. e. (Unless otherwise noted, assume all of the following events occurred during 2018 and that any balances given are stated as of December 31, 2018.) Budgeted sales are 1,100 tires for the first quarter and expected to increase by 200 tires per quarter. Cash sales are expected to be 20% of total sales, with the remaining 80% of sales on account. b. Finished Goods Inventory on December 31, 2018 consists of 300 tires at $35 each. Desired ending Finished Goods Inventory is 50% of the next quarter's sales; first quarter sales for 2020 are expected be 1,900 C. tires. FIFO inventory costing method is used. d. Raw Materials Inventory on December 31, 2018, consists of 600 pounds of rubber compound used to manufacture the tires. Direct materials requirements are 2 pounds of a rubber compound per tire. The cost of the compound is $5.50 per pound. Desired ending Raw Materials Inventory is 40% of the next quarter's direct materials needed for production; desired ending f. inventory for December 31, 2019 is 600 pounds; indirect materials are insignificant and not considered for budgeting purposes. 9. Each tire requires 0.60 hours of direct labor, direct labor costs average $20 per hour. h. Variable manufacturing overhead is $5 per tire. Fixed manufacturing overhead includes $2,500 per quarter in depreciation and $22,500 per quarter for other costs, such as utilities, i. insurance, and property taxes. Fixed selling and administrative expenses include $9,000 per quarter for salaries; $1,500 per quarter for rent: $1,650 per quarter i. for insurance; and $1,000 per quarter for depreciation. k. Variable selling and administrative expenses include supplies at 2% of sales. 1. Capital expenditures include $50,000 for new manufacturing equipment, to be purchased and paid in the first quarter. Cash receipts for sales on account are 70% in the quarter of the sale and 30% in the quarter following the sale; December 31, 2018, Accounts Receivable is received in the first quarter of 2019; uncollectible accounts are considered insignificant and not m. considered for budgeting purposes. Direct materials purchases are paid 60% in the quarter purchased and 40% in the following quarter; December 31, 2018, Accounts n. Payable is paid in the first quarter of 2019. 0. Direct labor, manufacturing overhead, and selling and administrative costs are paid in the quarter incurred. Income tax expense is projected at $3,500 per quarter and is paid in the quarter incurred. Cicono dacice to maintain a minimum och balance of 60 000 and bacown from the local banke nooded in inanamante of p. More Info C. d. e i. b. Finished Goods Inventory on December 31, 2018 consists of 300 tires at $35 each. Desired ending Finished Goods Inventory is 50% of the next quarter's sales; first quarter sales for 2020 are expected be 1,900 tires. FIFO inventory costing method is used. Raw Materials Inventory on December 31, 2018, consists of 600 pounds of rubber compound used to manufacture the tires, Direct materials requirements are 2 pounds of a rubber compound per tire. The cost of the compound is $5.50 per pound. Desired ending Raw Materials Inventory is 40% of the next quarter's direct materials needed for production; desired ending f. inventory for December 31, 2019 is 600 pounds; indirect materials are insignificant and not considered for budgeting purposes. g. Each tire requires 0.60 hours of direct labor; direct labor costs average $20 per hour. h. Variable manufacturing overhead is $5 per tire. Fixed manufacturing overhead includes $2,500 per quarter in depreciation and $22,500 per quarter for other costs, such as utilities, insurance, and property taxes. Fixed selling and administrative expenses include $9,000 per quarter for salaries: $1,500 per quarter for rent: $1,650 per quarter 1. for insurance; and $1,000 per quarter for depreciation. Variable selling and administrative expenses include supplies at 2% of sales. I. Capital expenditures include $50,000 for new manufacturing equipment, to be purchased and paid in the first quarter. Cash receipts for sales on account are 70% in the quarter of the sale and 30% in the quarter following the sale; December 31, 2018, Accounts Receivable is received in the first quarter of 2019; uncollectible accounts are considered insignificant and not m. considered for budgeting purposes. Direct materials purchases are paid 60% in the quarter purchased and 40% in the following quarter, December 31, 2018, Accounts n. Payable is paid in the first quarter of 2019, Direct labor, manufacturing overhead, and selling and administrative costs are paid in the quarter incurred. P. Income tax expense projected at $3,500 per quarter and is paid in the quarter incurred. Giseppe desires to maintain a minimum cash balance of $60,000 and borrows from the local bank as needed in increments of $1,000 at the beginning of the quarter, principal repayments are made at the beginning of the quarter when excess funds are available and in increments of $1,000; interest is 12% per year and paid at the beginning of the quarter based on the amount 9. outstanding from the previous quarter. k. 0. Requirements 1. Prepare Giseppe's operating budget and cash budget for 2019 by quarter. Required schedules and budgets include: sales budget, production budget, direct materials budget, direct labor budget, manufacturing overhead budget, cost of goods sold budget, selling and administrative expense budget, schedule of cash receipts, schedule of cash payments, and cash budget. Manufacturing overhead costs are allocated based on direct labor hours. Round all calculations to the nearest dollar. 2. Prepare Giseppe's annual financial budget for 2019, including budgeted income statement and budgeted balance sheet. Print Done