Requirement: Prepare a quarterly and annual budget for the following: (Follow the format for the budget provided in the 3rd picture)
A) Balance Sheet Budget
B) Inventories Budget
C) Property, Plant and Equipment Budget
D) Retained Earnings Budget
Preparing a Master Budget CPA Corporation manufactures and sells only one consumer good, product Chicken-Pork Adobo. As of December 31,2019, the Statement of Financial Position of the firm shows the following: Current Assets Cash P111,216.80 Accounts receivable (net) 327.283.20 Inventories 249,000.00 Other current assets 12,500.00 P700,000.00 Noncurrent Assets Property, plant and equipment P4,000,000.00 Accumulated depreciation (800,000.00 3.200,000.00 Total assets P3,900,000.00 Current liabilities Accounts payable P 21,582.40 Income tax payable 105,000.00 Property tax payable 10,000.00 Bonds payable (10%) 400,000.00 P536,582.40 Noncurrent Liabilities Bonds payable (10%) 800,000.00 Total liabilities P1 336 582.40 Shareholders' Equity Ordinary share capital (P100 par) P2,000,000 Retained earnings 563.417.60 2,563,417.60 Total liabilities and equity P3 900 000.00 During the last month of 2019 to the early weeks of January 2020, the management has been gathering data for preparing the 2020 budget. Data gathered by the controller are as follows: a. Marketing department is projected to sell 12.500 units in the first quarter and expects to increase it by 10% per quarter for the next two years. The sales price is expected to be at P120/unit b. The company established some policies to guide operations throughout the year. For the production department, enough goods must be produced such that 20% of the goods expected to be sold in the next quarter will be on hand at end of each current quarter. Direct materials at the end of each quarter must be. 30% of the direct materials requirement for the next quarter. Other data for production are as follows: Direct materials / unit 400g @ P5 per 100g Direct labor / unit 3 hrs @ P10 per hr Indirect labor P2 / unit Indirect materials P5/ unit Utilities P3/unit +P55, 000 per quarter Property taxes P5,000-per quarter Depreciation (50% building. 50% on P50,000 per quarter equipment) c. To attract customers, the company will be selling on normal credit terms, as usual. The company projected that 75% of sales will be collected during the quarter of sale, and the remaining will be collected in the following quarter, with 1% of total sales estimated- as uncollectible. 225 Inventories Budget 226 227 Desired direct materials, ending 228 Multiply: purchase price per kg 229 Direct materials, ending 230 Finished goods, ending 231 Inventories 232 233 Property, plant and Equipment Budget 234 235 Cost 236 Accumulated depreciation, beg 237 Depreciation 238 Accumulated depreciation, end 239 Property, plant and Equipment, net 240 241 Retained Earnings Budget 242 243 Retained Earnings, beg. 244 Net Income 245 Dividends 246 Retained Earnings, end. 247 Preparing a Master Budget CPA Corporation manufactures and sells only one consumer good, product Chicken-Pork Adobo. As of December 31,2019, the Statement of Financial Position of the firm shows the following: Current Assets Cash P111,216.80 Accounts receivable (net) 327.283.20 Inventories 249,000.00 Other current assets 12,500.00 P700,000.00 Noncurrent Assets Property, plant and equipment P4,000,000.00 Accumulated depreciation (800,000.00 3.200,000.00 Total assets P3,900,000.00 Current liabilities Accounts payable P 21,582.40 Income tax payable 105,000.00 Property tax payable 10,000.00 Bonds payable (10%) 400,000.00 P536,582.40 Noncurrent Liabilities Bonds payable (10%) 800,000.00 Total liabilities P1 336 582.40 Shareholders' Equity Ordinary share capital (P100 par) P2,000,000 Retained earnings 563.417.60 2,563,417.60 Total liabilities and equity P3 900 000.00 During the last month of 2019 to the early weeks of January 2020, the management has been gathering data for preparing the 2020 budget. Data gathered by the controller are as follows: a. Marketing department is projected to sell 12.500 units in the first quarter and expects to increase it by 10% per quarter for the next two years. The sales price is expected to be at P120/unit b. The company established some policies to guide operations throughout the year. For the production department, enough goods must be produced such that 20% of the goods expected to be sold in the next quarter will be on hand at end of each current quarter. Direct materials at the end of each quarter must be. 30% of the direct materials requirement for the next quarter. Other data for production are as follows: Direct materials / unit 400g @ P5 per 100g Direct labor / unit 3 hrs @ P10 per hr Indirect labor P2 / unit Indirect materials P5/ unit Utilities P3/unit +P55, 000 per quarter Property taxes P5,000-per quarter Depreciation (50% building. 50% on P50,000 per quarter equipment) c. To attract customers, the company will be selling on normal credit terms, as usual. The company projected that 75% of sales will be collected during the quarter of sale, and the remaining will be collected in the following quarter, with 1% of total sales estimated- as uncollectible. 225 Inventories Budget 226 227 Desired direct materials, ending 228 Multiply: purchase price per kg 229 Direct materials, ending 230 Finished goods, ending 231 Inventories 232 233 Property, plant and Equipment Budget 234 235 Cost 236 Accumulated depreciation, beg 237 Depreciation 238 Accumulated depreciation, end 239 Property, plant and Equipment, net 240 241 Retained Earnings Budget 242 243 Retained Earnings, beg. 244 Net Income 245 Dividends 246 Retained Earnings, end. 247
