(LO 13-4, 5, 6) 13-62. Comprehensive Budget Plan Panther Corporation appeared to be experiencing a good year. Sales in the first quarter were one-third ahead of last year, and the sales department predicted that this rate would continue throughout the entire year. The controller asked Janet Nomura, a summer accounting intern, to prepare a draft forecast for the year and to analyze the differences from last year's results. She based the forecast on actual results obtained in the first quarter plus the expected costs of production to be completed in the remainder of the year. She worked with various department heads (production, sales, and so on) to get the necessary information. The results of these efforts follow. Page 575 Page 575 PANTHER CORPORATION Expected Account Balances for December 31, Year 2 Cash $ 4,800 Accounts receivable 320,000 Inventory (January 1, year 2) 192,000 Plant and equipment 520,000 Accumulated depreciation $ 164,000 Accounts payable 180,000 Notes payable (due within one year) 200,000 Accrued payables 93,000 Common stock 280,000 Retained earnings 432,800 Sales revenue 2,400,000 Other income 36,000 Manufacturing costs Materials 852,000 Direct labor 872,000 Variable overhead 520,000 Depreciation 20,000 Other fixed overhead 31,000 Marketing 80,000 64,000 180,000 Commissions Salaries Promotion and advertising Administrative Salaries Travel Office costs Income taxes Dividends 64,000 10,000 36,000 20,000 $3.785,800 $3.785,800 Adjustments for the change in inventory and for income taxes have not been made. The scheduled production for this year is 450,000 units, and planned sales volume is 400,000 units. Sales and production volume was 300,000 units last year. The company uses a full-absorption costing and Firo inventory system and is subject to a 40 percent income tax rate. The actual income statement for last year follows. PANTHER CORPORATION Statement of Income and Retained Earnings For the Budget Year Ended December 31, Year 1 Revenues Sales revenue $1,800,000 Other income 60,000 $1,860,000 Expenses Cost of goods sold Materials $ 528,000 Direct labor 540,000 Variable overhead 324,000 Fixed overhead 48,000 $1.440,000 192.000 $1.632,000 192,000 51.440,000 Parce 576 $54.000 60,000 126,000 240,000 Beginning inventory Ending inventory Selling Salaries Commissions Promotion and advertising General and administrative Salaries Travel Office costs Income taxes Operating profit Beginning retained earnings Subtotal Less dividends Ending retained eamings $ 56,000 8,000 32,000 96,000 33,600 1,809,600 50,400 402,400 $452,800 20,000 $ 432,800 Required Prepared a budgeted income statement and balance sheet