The totals sales are correct

800 73,700 Gridley Tire Company Balance Sheet December 31, 2018 Assets Current Assets: Cash 48,000 Accounts Receivable 22,000 Raw Materials Inventory Finished Goods Inventory 2,900 Total Current Assets Property, Plant, and Equipment: Equipment 142,000 Less: Accumulated Depreciation (77,000) Total Assets Liabilities Current Liabilities: Accounts Payable $ Stockholders' Equity Common Stock, no par $ 130,000 Retained Earnings 1,200 Total Stockholders' Equity Total Liabilities and Stockholders' Equity 65,000 138,700 7,500 131,200 138,700 (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 1.800 tires for the first quarter and expected to increase by 100 tires per quarter. Cash sales are expected to be 10% of total sales, with the remaining 90% of sales on account. b. Finished Goods Inventory on December 31, 2018 consists of 100 tires at $29 each. c. Desired ending Finished Goods Inventory is 40% of the next quarter's sales, first quarter sales for 2020 are expected be 2,200 tires. FIFO inventory costing method is used. d. Raw Materials Inventory on December 31, 2018, consists of 200 pounds of rubber compound used to manufacture the tires. e. Direct materials requirements are 2 pounds of a rubber compound per tire. The cost of the compound is $4.00 per pound. 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 200 pounds, indirect materials are insignificant and not considered for budgeting purposes. g. Each tire requires 0.40 hours of direct labor, direct labor costs average $14 per hour. h. Variable manufacturing overhead is $2 per tire. i. Fixed manufacturing overhead includes $5,500 per quarter in depreciation and $20,240 per quarter for other costs, such as utilities, insurance, and property taxes. j. Fixed selling and administrative expenses include $13,000 per quarter for salaries: $5,100 per quarter for rent: $1,800 per quarter for insurance, and $500 per quarter for depreciation. Variable selling and administrative expenses include supplies at 1% of sales. I. Capital expenditures include $45,000 for new manufacturing equipment, to be purchased and paid in the first quarter. m. Cash receipts for sales on account are 65% in the quarter of the sale and 35% 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. n. 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. 0. Direct labor, manufacturing overhead, and selling and administrative costs are paid in the quarter incurred. p. Income tax expense is projected at $3,000 per quarter and is paid in the quarter incurred. 4. Gridley desires to maintain a minimum cash balance of $45,000 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 6% per year and paid at the beginning of the quarter based on the amount outstanding from the previous quarter. Cash Receipts from Customers First Quarter Third Quarter 140000 Second Quarter 133000 Second Quarter Fourth Quarter 147000 Total 546000 Total sales 126000 First Third Fourth Quarter Quarter Quarter Total 22000 Cash Receipts from Customers: Accounts Receivable balance, December 31, 2018 1st Qtr.Cash sales 1st Qtr.Credit sales, collection of Qtr. 1 sales in Qtr. 1 1st Qtr.-Credit sales, collection of Qtr. 1 sales in Qtr. 2 2nd Qtr.Cash sales 2nd Qtr.-Credit sales, collection of Qtr. 2 sales in Qtr. 2 2nd Qtr.-Credit sales, collection of Qtr. 2 sales in Qtr. 3 3rd Qtr.Cash sales 3rd Qtr. Credit sales, collection of Qtr. 3 sales in Qtr. 3 3rd Qtr.Credit sales, collection of Qtr. 3 sales in Qtr. 4 4th Qtr.Cash sales 4th Qtr.Credit sales, collection of Qtr. 4 sales in Qtr. 4 Total cash receipts from customers Accounts Receivable balance, December 31, 2019: 4th Qtr.Credit sales, collection of Qtr. 4 sales