stafi. It was Novemher of 20x4, and the group was discussing preparation of the firm's master budget for 20x5. "I ve dectided to go ahead and parchase the industrial robot we've bect talking about. We'll make the acquisition on January 2 of next ycar, andi expect it will take most of the year to train the perwonnel and reorganize the prodaction process to take full advantage of the newa equiprnent. In response to a question about financing the acquisition, Rexford replicd as follows: "The robot will cost $950,000. There will also be an additional $50,000 in ancillary equipment to be purchased. We'II finance these parchases with a onc-ycas S1,000,000 losn froun Shark Bank and Trast Company. I've negotiated a repayment schedule of four equal installments on the last day of each quarter. The interest rate will be 10 pereent, and interest payaents will be quarterly as well." With that the meeting . broke up, and the budget process was on. Photo Artistry. Company is a manufacturer of metal pictore frames. The firm's two nroduct lines are designated as S (small frames; 57 inches) and . (large frames; 810 inches). The primary raw materials are flexible metal strips and 9 -inch by 24 -inch glass shects. Each S frame requires a 2 -foot. metal strip: an L frame requires a 3 -foot strip. Allowing for nonmal breakage and scrap glass, the cocspany can get either four S frames or two L. frames out of a glass nhect. Other tiwe materials, sach as cardboard backing, are insignificant in cost and are treated as indirect materals. Fiaily Jacksoa. Paoto Artistry's controller, is in charge of peeparing the master budget for 20c5. She has gathered the following information: 1. Sales in the fouth quarter of 20x4 are expected to be 50,000S framcs and 40,000L frames. The sales manager predicts that over the next fwo years, sales in cach peoduct line will grow by 5.0,X0) units each qquarter over the previous quarter. For example, S frame sales in the fird quarter of 205 are expected to be 55,000 unaits. 2. Fhoto Artistry's sales history indicates that 60 percent of all sales are oe credit, with the teminudet. of the sales in cash. The company's collection erperience shows that 80 percent of the sredit sales. are collected durias the quarter in which the sale is thade, while the reanaining 20 perceat is collected in the following quarter. (Fot simplicity. assame the company is able to collect 100 percent of its accotants reccivable.) 3. The S frame selis for $10, and the 1 . frame sells for $15. These prices are expected to bold constant thepenghoat 205. 4. The production manager attempts to end each quarter with enough finisbed-goods inventory in each product line to cover 20 percent of the following quarter's sales. Morcover, an atternpt is made to end each quaater with 20 percent of the glass sheets necded for the followiag quarter's prodaction. Since metal strips are parchased locally, the company buys them on a just-in-time basis; imventory is negligible. 5. All direct-material purchases are made on account, and so percent of cach qaarter's parchases are paid in cash during the same quarter as the parchave. The other 20 percent is paid in the next quarter. 6. Iadireet materials are purchased with eash as needed. Workoin-process is negligible. 9. Photo Artisny's quanerby selling and administrative expenses are 5100,000 , paid in cout 10. Jackon anticipates that dividends of $50,000 will be declared and paid in cash each quirer. 11. Photo Antiugy's propeted balance sheer as of December 31, 20x4, follows: Requine: Prepure Photo Aetisery Conpany's master bedget for 205 by completiag the folleving schnales and staicenents 1. Sales budget: 2. Cava receipts bodget: \begin{tabular}{lcccc} \hline & & & & \\ 1st & 2015 & & \\ Quarter & 2nd & 3rd & ath & Entlie \\ & Quarter & Quarter & Quarter & Year \end{tabular} rabe darip ourert quarlest. cen wolctons toes cout sak Zh dentr ainers cood silos. rov if proses quationed lats 4. Direct-material bodget: Neta siper S trames to be prodicod x Metal quatily per unt (i.) Heeded for S trama production L hrres to te produced x Metal quatity per init (It) Neded for L trate production Tote arefal needad lor prodicilar, to be pinchased (0.) Fico per foot cest of meal strins bo be purchised Giss shets: S tramas ta be prodmed x cizss quelty per ind fecete). Neuded for S frame prodjction L trimas to te produced x chas quatily per une (sheste) Needad for L trame perdoction Tidil plass naededfor groduction isheetst Add: Desired ending invertor Toda giss neads: less fipected begining invertary Eass bo te purchased x Price ner glass theot Poss of glass to be parchased Toil nez materiaf purdises (inets and glass) 6. Seminary cash budjet: 6. Prepare a budgeled schedule of cost of goods manufactured and sold for the year 20x5. (Hint: In the budget, actual and applied overhead will be equal.) 8. Prepare Photo Artistry's budgeted income statement for 205. (Ignore income taxes.) 9. Prepare Photo Artistry's budgeted statement of retained eamings for 20x5. 10. Prepare Photo Artistry's budgeled balance sheet as of December 31,205. stafi. It was Novemher of 20x4, and the group was discussing preparation of the firm's master budget for 20x5. "I ve dectided to go ahead and parchase the industrial robot we've bect talking about. We'll make the acquisition on January 2 of next ycar, andi expect it will take most of the year to train the perwonnel and reorganize the prodaction process to take full advantage of the newa equiprnent. In response to a question about financing the acquisition, Rexford replicd as follows: "The robot will cost $950,000. There will also be an additional $50,000 in ancillary equipment to be purchased. We'II finance these parchases with a onc-ycas S1,000,000 losn froun Shark Bank and Trast Company. I've negotiated a repayment schedule of four equal installments on the last day of each quarter. The interest rate will be 10 pereent, and interest payaents will be quarterly as well." With that the meeting . broke up, and the budget process was on. Photo Artistry. Company is a manufacturer of metal pictore frames. The firm's two nroduct lines are designated as S (small frames; 57 inches) and . (large frames; 810 inches). The primary raw materials are flexible metal strips and 9 -inch by 24 -inch glass shects. Each S frame requires a 2 -foot. metal strip: an L frame requires a 3 -foot strip. Allowing for nonmal breakage and scrap glass, the cocspany can get either four S frames or two L. frames out of a glass nhect. Other tiwe materials, sach as cardboard backing, are insignificant in cost and are treated as indirect materals. Fiaily Jacksoa. Paoto Artistry's controller, is in charge of peeparing the master budget for 20c5. She has gathered the following information: 1. Sales in the fouth quarter of 20x4 are expected to be 50,000S framcs and 40,000L frames. The sales manager predicts that over the next fwo years, sales in cach peoduct line will grow by 5.0,X0) units each qquarter over the previous quarter. For example, S frame sales in the fird quarter of 205 are expected to be 55,000 unaits. 2. Fhoto Artistry's sales history indicates that 60 percent of all sales are oe credit, with the teminudet. of the sales in cash. The company's collection erperience shows that 80 percent of the sredit sales. are collected durias the quarter in which the sale is thade, while the reanaining 20 perceat is collected in the following quarter. (Fot simplicity. assame the company is able to collect 100 percent of its accotants reccivable.) 3. The S frame selis for $10, and the 1 . frame sells for $15. These prices are expected to bold constant thepenghoat 205. 4. The production manager attempts to end each quarter with enough finisbed-goods inventory in each product line to cover 20 percent of the following quarter's sales. Morcover, an atternpt is made to end each quaater with 20 percent of the glass sheets necded for the followiag quarter's prodaction. Since metal strips are parchased locally, the company buys them on a just-in-time basis; imventory is negligible. 5. All direct-material purchases are made on account, and so percent of cach qaarter's parchases are paid in cash during the same quarter as the parchave. The other 20 percent is paid in the next quarter. 6. Iadireet materials are purchased with eash as needed. Workoin-process is negligible. 9. Photo Artisny's quanerby selling and administrative expenses are 5100,000 , paid in cout 10. Jackon anticipates that dividends of $50,000 will be declared and paid in cash each quirer. 11. Photo Antiugy's propeted balance sheer as of December 31, 20x4, follows: Requine: Prepure Photo Aetisery Conpany's master bedget for 205 by completiag the folleving schnales and staicenents 1. Sales budget: 2. Cava receipts bodget: \begin{tabular}{lcccc} \hline & & & & \\ 1st & 2015 & & \\ Quarter & 2nd & 3rd & ath & Entlie \\ & Quarter & Quarter & Quarter & Year \end{tabular} rabe darip ourert quarlest. cen wolctons toes cout sak Zh dentr ainers cood silos. rov if proses quationed lats 4. Direct-material bodget: Neta siper S trames to be prodicod x Metal quatily per unt (i.) Heeded for S trama production L hrres to te produced x Metal quatity per init (It) Neded for L trate production Tote arefal needad lor prodicilar, to be pinchased (0.) Fico per foot cest of meal strins bo be purchised Giss shets: S tramas ta be prodmed x cizss quelty per ind fecete). Neuded for S frame prodjction L trimas to te produced x chas quatily per une (sheste) Needad for L trame perdoction Tidil plass naededfor groduction isheetst Add: Desired ending invertor Toda giss neads: less fipected begining invertary Eass bo te purchased x Price ner glass theot Poss of glass to be parchased Toil nez materiaf purdises (inets and glass) 6. Seminary cash budjet: 6. Prepare a budgeled schedule of cost of goods manufactured and sold for the year 20x5. (Hint: In the budget, actual and applied overhead will be equal.) 8. Prepare Photo Artistry's budgeted income statement for 205. (Ignore income taxes.) 9. Prepare Photo Artistry's budgeted statement of retained eamings for 20x5. 10. Prepare Photo Artistry's budgeled balance sheet as of December 31,205