Royal Bank of America has asked Maquire and Ferlow Ltd. for a budgeted balance sheet for the year ended December 31, 2020. The following information is available:

1. The cash budget shows an expected cash balance of $26,000 at December 31, 2020.

2. The 2020 sales budget shows total annual sales of $500,000. All sales are made on account and accounts receivable at December 31, 2020 are expected to be 8% of annual sales.

3. The merchandise purchases budget shows budgeted cost of goods sold for 2020 of $210,000 and ending merchandise inventory of $21,000. 20% of the ending inventory is expected to have not yet been paid at December 31, 2020.

4. The December 31, 2019 balance sheet includes the following balances: Equipment $127,000, Accumulated Depreciation $52,000, Common Stock $68,000, and Retained Earnings $21,000.

5. The budgeted income statement for 2020 includes the following: depreciation on equipment $6,000, federal income taxes $21,000, and net income $41,800. The income taxes will not be paid until 2021.

6. In 2020, management does not expect to purchase additional equipment or to declare any dividends. It does expect to pay all operating expenses, other than depreciation, in cash.

Instructions

Prepare an unclassified budgeted balance sheet on December 31, 2020.