The Gilder Tire Company manufactures racing tires for bicycles. Gilder sells tires for S85 each. Gilder is planning Other data for Gilder Tire Company: for the next year by developing a master budget by quarters. Gilder's balance sheet for December 31,2018,Click the icon to view the other data.) follows: EEB (Click the icon to view the balance sheet.) Read the requirements More Info (Unless otherwise noted, assume all of the following events occurred during 2018 and that any balances given are stated as of December 31, 2018.) a. Budgeted sales are 1,000 tires for the first quarter and expected to increase by 200 tires per quarter. Cash sales are expected to be 40% of total sales, with the remaining 60% of sales on account. b. Finished Goods Inventory on December 31, 2018 consists of 700 tires at $29 each Desired ending Finished Goods Inventory is 30% of the next quarter's sales; first quarter sales for 2020 are expected be 1,800 tires. FIFO inventory costing method is used. c. d. Raw Materials Inventory on December 31, 2018, consists of 1,400 pounds of rubber compound used to manufacture the tires Direct materials requirements are 2 pounds of a rubber compound per tire. The cost of the compound is S7.00 per pound. e. f. Desired ending Raw Materials Inventory is 10% of the next quarter's direct materials needed for production; desired ending inventory for December 31, 2019 is 1,400 pounds; indirect materials are insignificant and not considered for budgeting purposes. Each tire requires 0.50 hours of direct labor; direct labor costs average $20 per hour g. h. Variable manufacturing overhead is $5 per tire i. Fixed manufacturing overhead includes $3,000 per quarter in depreciation and $6,450 per quarter for other costs, such as utilities, insurance, and property taxes. j. Fixed selling and administrative expenses include $12,000 per quarter for salaries; S3,600 per quarter for rent; $1,650 per quarter for insurance; and $1,000 per quarter for depreciation. k. Variable selling and administrative expenses include supplies at 2% of sales. I. Capital expenditures include $10,000 for new manufacturing equipment, to be purchased and paid in the first quarter. m. Cash receipts for sales on account are 85% in the quarter of the sale and 15% in the quarter following the sale: December 31, 2018, Accounts Receivable is received in the first quarter of 2019; uncollectible accounts are considered insignificant and not considered for budgeting purposes. Direct materials purchases are paid 60% in the quarter purchased and 40% in the following quarter; December 31, 2018, Accounts Payable is paid in the first quarter of 2019 n. Direct labor, manufacturing overhead, and selling and administrative costs are paid in the quarter incurred. o. p. Income tax expense is projected at $2,500 per quarter and is paid in the quarter incurred Gilder desires to maintain a minimum cash balance of S50,000 and borrows from the local bank as needed in increments of $1,000 at the beginning of the quarter; principal repayments are made at the beginning of the quarter when excess funds are available and in increments of $1,000; interest is 12% per year and paid at the beginning of the quarter based on the amount outstanding from the previous quarter q. Data Table Gilder Tire Company Balance Sheet December 31, 2018 Assets Current Assets: S 55,000 Cash 50,000 Accounts Receivable Raw Materials Inventory 9,800 20,300 Finished Goods Inventory 135,100 Total Current Assets Property, Plant, and Equipment: 155,000 Equipment 105,000 (50,000) Less: Accumulated Depreciation 240,100 Total Assets Liabilities Current Liabilities Accounts Payable 17,000 Stockholders' Equity Common Stock, no par $ 110,000 113,100 Retained Earnings 223,100 Total Stockholders' Equity 240,100 Total Liabilities and Stockholders' Equity 1 Requirements 1. Prepare Gilder's operating budget and cash budget for 2019 by quarter. Required schedules and budgets include: sales budget, production budget, direct materials budget, direct labor budget, manufacturing overhead budget, cost of goods sold budget, selling and administrative expense budget, schedule of cash receipts, schedule of cash payments, and cash budget. Manufacturing overhead costs are allocated based on direct labor hours. Round all calculations to the nearest dollar. 2. Prepare Gilder's annual financial budget for 2019, including budgeted income statement and budgeted balance sheet. Print Done The Gilder Tire Company manufactures racing tires for bicycles. Gilder sells tires for S85 each. Gilder is planning Other data for Gilder Tire Company: for the next year by developing a master budget by quarters. Gilder's balance sheet for December 31,2018,Click the icon to view the other data.) follows: EEB (Click the icon to view the balance sheet.) Read the requirements More Info (Unless otherwise noted, assume all of the following events occurred during 2018 and that any balances given are stated as of December 31, 2018.) a. Budgeted sales are 1,000 tires for the first quarter and expected to increase by 200 tires per quarter. Cash sales are expected to be 40% of total sales, with the remaining 60% of sales on account. b. Finished Goods Inventory on December 31, 2018 consists of 700 tires at $29 each Desired ending Finished Goods Inventory is 30% of the next quarter's sales; first quarter sales for 2020 are expected be 1,800 tires. FIFO inventory costing method is used. c. d. Raw Materials Inventory on December 31, 2018, consists of 1,400 pounds of rubber compound used to manufacture the tires Direct materials requirements are 2 pounds of a rubber compound per tire. The cost of the compound is S7.00 per pound. e. f. Desired ending Raw Materials Inventory is 10% of the next quarter's direct materials needed for production; desired ending inventory for December 31, 2019 is 1,400 pounds; indirect materials are insignificant and not considered for budgeting purposes. Each tire requires 0.50 hours of direct labor; direct labor costs average $20 per hour g. h. Variable manufacturing overhead is $5 per tire i. Fixed manufacturing overhead includes $3,000 per quarter in depreciation and $6,450 per quarter for other costs, such as utilities, insurance, and property taxes. j. Fixed selling and administrative expenses include $12,000 per quarter for salaries; S3,600 per quarter for rent; $1,650 per quarter for insurance; and $1,000 per quarter for depreciation. k. Variable selling and administrative expenses include supplies at 2% of sales. I. Capital expenditures include $10,000 for new manufacturing equipment, to be purchased and paid in the first quarter. m. Cash receipts for sales on account are 85% in the quarter of the sale and 15% in the quarter following the sale: December 31, 2018, Accounts Receivable is received in the first quarter of 2019; uncollectible accounts are considered insignificant and not considered for budgeting purposes. Direct materials purchases are paid 60% in the quarter purchased and 40% in the following quarter; December 31, 2018, Accounts Payable is paid in the first quarter of 2019 n. Direct labor, manufacturing overhead, and selling and administrative costs are paid in the quarter incurred. o. p. Income tax expense is projected at $2,500 per quarter and is paid in the quarter incurred Gilder desires to maintain a minimum cash balance of S50,000 and borrows from the local bank as needed in increments of $1,000 at the beginning of the quarter; principal repayments are made at the beginning of the quarter when excess funds are available and in increments of $1,000; interest is 12% per year and paid at the beginning of the quarter based on the amount outstanding from the previous quarter q. Data Table Gilder Tire Company Balance Sheet December 31, 2018 Assets Current Assets: S 55,000 Cash 50,000 Accounts Receivable Raw Materials Inventory 9,800 20,300 Finished Goods Inventory 135,100 Total Current Assets Property, Plant, and Equipment: 155,000 Equipment 105,000 (50,000) Less: Accumulated Depreciation 240,100 Total Assets Liabilities Current Liabilities Accounts Payable 17,000 Stockholders' Equity Common Stock, no par $ 110,000 113,100 Retained Earnings 223,100 Total Stockholders' Equity 240,100 Total Liabilities and Stockholders' Equity 1 Requirements 1. Prepare Gilder's operating budget and cash budget for 2019 by quarter. Required schedules and budgets include: sales budget, production budget, direct materials budget, direct labor budget, manufacturing overhead budget, cost of goods sold budget, selling and administrative expense budget, schedule of cash receipts, schedule of cash payments, and cash budget. Manufacturing overhead costs are allocated based on direct labor hours. Round all calculations to the nearest dollar. 2. Prepare Gilder's annual financial budget for 2019, including budgeted income statement and budgeted balance sheet. Print Done