S0.70 50.80 TBA, Inc., manufactures and sells concrete block for residential and commercial building. TBA expects to sell the following in 20x1: Q uarter Quarter 2 Quarter 3 Quarter 4 Units 2,000,000 6,000,000 6,000,000 2,000,000 Unit selling price S0.70 S0.80 TBA expects the following unit sales and desired ending inventory in 20x1: Quarter Unit Sales Ending Inventory 2,000,000 500.000 6,000,000 500.000 6,000,000 100,000 2,000,000 100,000 Inventory on both January 1, 20x1, and January 1, 20x2, is expected to be 100,000 blocks. Each block requires 26 pounds of raw materials (a mixture of cement, sand, gravel, shale, pumice, and water). TBA's raw materials inventory policy is to have 5 million pounds in ending inventory for the third and fourth quarters and 8 million pounds in ending inventory for the first and second quarters. Thus, desired direct materials inventory on both January 1, 20x1, and January 1, 20x2, is 5,000,000 pounds of materials. Each pound of raw materials costs $0.01. Each block requires 0.015 direct labor hour, direct labor is paid $14 per direct labor hour. incible.ondhand direct labochou Fred. chandi hudentet 220.000 de (Illrllullillollell Each block requires 0.015 direct labor hour, direct labor is paid $14 per direct labor hour. Variable overhead is $8 per direct labor hour. Fixed overhead is budgeted at $320,000 per quarter ($100,000 for supervision, $200,000 for depreciation, and $20,000 for rent) TBA also provided the information that beginning finished goods inventory is $55,000, and the ending finished goods inventory budget for ABT for the year $67,000. TBA's only variable marketing expense is a $0.05 commission per unit (block) sold. Fixed marketing expenses for each quarter include the following 520.000 Salaries Depreciation Travel Advertising expense is $10,000 in Quarters 1. 3. and 4. However, at the beginning of the summer building season, TBA increases advertising; in Quarter 2, advertising expense is $15,000. TBA has no variable administrative expense. Fixed administrative expenses for each quarter include the following WOJCI TBA has no variable administrative expense. Fixed administrative expenses for each quarter include the following: Salaries Insurance Depreciation Travel $35,000 4,000 12.000 2,000 Income taxes are paid at the rate of 30 percent of operating income. Of the sales on account, 70 percent are collected in the quarter of sale: the remaining 30 percent are collected in the quarter following the sale. Total sales for the fourth quarter of 20x0 totaled $2,000,000 All materials are purchased on account: 80 percent of purchases are paid for in the quarter of purchase. The remaining 20 percent are paid in the following quarter. The purchases for the fourth quarter of 20x0 were $500,000 TBA requires a $100,000 minimum cash balance for the end of each quarter. On December 31, 20x0. the cash balance was $120.000 Money can be borrowed and repaid in multiples of $100.000. Interest is 12 percent per year. Interest payments are made only for the amount of the principal being repaid. All borrowing takes place at the beginning of a quarter, and all repayment takes place at the end of a quarter Budgeted depreciation is $200,000 per quarter for overhead, $5,000 for marketing expense, and $12,000 for administrative expense. (Remember that depreciation is not a cash expense and must be deleted from total expenses before the cash budget is prepared.) The capital budget for 20x1 revealed plans to purchase additional equipment for $600,000 in the first quarter. The acquisition will be financed with operating cash, supplementing it with short-term loans as The capital budget for 20x1 revealed plans to purchase additional equipment for $600,000 in the first quarter. The acquisition will be financed with operating cash, supplementing it with short-term loans as necessary Corporate income taxes of $20,700 will be paid at the end of the fourth quarter. The balance sheet for the beginning of the year is given: $ 525,000 Balance Sheet December 31, 20x0 Assets Cument $ 120.000 Account 20 Mat t ory Finished goods inventory Total current sets... Property, plant and equipment (PPSE Land $2.500.000 Buildings and equipment 9.000.000 Accumulated depreciation 14.500.000 Total PPLE Total Labilities and Stockholders' Equity Current l es Accounts payable. Stockholders equity Common stock, no par. $ 600.000 Retained emings 6.825.000 Total stockholders equity Total and stockholders' equity 7 000 000 35600 $ 100.000 15.000 The balance sheet for the beginning of the year is given: Balance Sheet December 31, 20x0 $ 525,000 Current assets Cash $ 120,000 Accounts receivable 300.000 Materials inventory 50,000 Finished goods inventory 55.000 Total current assets Property, plant, and equipment (PP&E): Land $ 2,500,000 Buildings and equipment 9,000,000 Accumulated depreciation (4.500,000) Total PP&E. Total assets....... Liabilities and Stockholders' Equity Current liabilities: Accounts payable Stockholders' equity: Common stock, no par $ 600,000 Retained earnings 16,825,000 Total stockholders' equity Total liabilities and stockholders equity 7,000,000 $7,525,000 $ 100,000 17,425,000 57.525.000 13. Prepare the Budgeted Balance Sheet for the coming year