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KURIAN INDUSTRIES Budgeted Income Statement For the Year Ending December 31, 2016 Sales Cost of goods sold Finished goods inventory, January 1 $ Cost of goods manufactured Cost of goods available for sale Finished goods inventory, December 31 Cost of goods sold Gross profit Selling and administrative expenses V Income from operations V Interest expense Income before income taxes Income tax expense V Net income VAccounts payable 45,100 Total liabilities 70,600 Shareholders' equity Common stock $49,900 Retained earnings 28,800 Total shareholders' equity 78,700 Total liabilities and shareholders' equity $149,300 Budgeted data for the year 2016 include the following. Sales budget (8,500 units at $38) $96,900 $323,000 Direct materials used 17,400 69,600 Direct labor 12,900 55,500 Manufacturing overhead applied 10,800 72,300 Selling and administrative expenses 18,200 76,200 To meet sales requirements and to have 3,100 units of nished goods on hand at December 31, 2016, the production budget shows 9,400 required units of output. The total unit cost of production is expected to be $21. Kurian Industries uses the rst-in, first-out (FIFO) inventory costing method. Selling and administrative expenses include $4,300 for depreciation on equipment. The company expects interest expense to be $3,800 for the year and income taxes to be 40% of income before income taxes. All sales and purchases are on account. The company expects to collect 60% of the quarterly sales in cash within the quarter and the remainder in the following quarter. It pays direct materials purchased from suppliers 50% in the quarter incurred and the remainder in the following quarter. Purchases in the fourth quarter were the same as the materials used. In 2016, the company expects to purchase additional equipment costing $17,700. It expects to pay $8,100 on notes payable plus all interest due and payable to December 31 (included in interest expense $3,800, above). Accounts payable at December 31, 2016, includes amounts due to suppliers (see above) plus other accounts payable of $5,200. In 2016, the company expects to declare and pay a $5,300 cash dividend. Unpaid income taxes at December 31 will be $9,672. The company's cash budget shows an expected cash balance of $15,872 at December 31, 2016. v (31) Prepare a budgeted income statement for 2016. In preparing the income statement, you will need to calculate the cost of goods manufactured (materials + labour + overhead) and nished goods inventory (December 31, 2016). (Round answers to a decimal places, e.g. 125.) December 31, 2015 Current assets Cash $7,600 Accounts receivable 82,000 Finished goods inventory (2,200 units) 30,100 Total current assets 119,700 Equipment $40,300 Less: Accumulated depreciation 10,700 29,600 Total assets $149300 Liabilities Notes payable $25,500 Accounts payable 45,100 Total liabilities 70,600 Shareholders' equity Common stock $49,900 Retained earnings 28,800 Total shareholders' equity 78,700 Total liabilities and shareholders' equity $149300 Budgeted data for the year 2016 include the following. Sales budget (8,500 units at $38) $96,900 $323,000 Direct materials used 17,400 69,600 Direct labor 12,900 55,500 Manufacturing overhead applied 10,800 72,300 Selling and administrative expenses 18,200 76,200