Using the revised year one budget schedules and financial statements, comment on the differences between the originally budgeted information under constant demand prepared in part two and the revised budgeted cash budget, income statement and balance sheet provided. Have dramatic changes occurred in predicted profit, financial position, and cash flows and if so, what are the primary causes of these changes? Discuss the major differences in beginning of year projections and mid-year projections now that actual data is available for the first two quarters. Hint: you may want to calculate percentage of change in items on the cash budget, income statement and balance sheet (horizontal rate of change) comparing the original budget to the mid-year revised budget. (question should be answered in paragraph form)

Cash Budget

Income Budget

Balance sheet

Water Play, Inc. Revised Cash Budget December 31, 20XX Beginning cash balance Cash collections Cash available Disbursements: Material purchases Direct labor Manufacturing overhead Selling and administrative Total disbursements Excess or (Deficiency) Financing section: Borrowings Repayments Interest on long-term note Interest on short-term borrowing Financing total Ending cash balance Stockholders' Equity Common stock (\$1 par value. 25 million shares authorized, 3 million shares issued and outstanding Paid in capital Total contributed capital Retained earnings Total stockholders' equity Total liabilities and stockholders' equity December 31, 20XX Assets Currrent assets: Cash Accounts receivable Raw material inventory Finished goods inventory Total current assets Noncurrent assets: Land Buildings Equipment Less: Accumulated depreciation Iotal Noncurrent Assets Total Assets \begin{tabular}{rr} $66.618.588 & $203.406.800 \\ 175.500 .000 & 175.500 .000 \\ 13.500 .000 & 13.500 .000 \\ 34.096 .410 & 32.860 .200 \\ \hline \end{tabular} S 289.714,997 12.000 .000 72.000 .000 140.000 .000 (25.550.000) \$ 425.267 .000 12.000 .000 72.000,000 140.000 .000 (25.550.000) 198.450.000$623.717.000 Liabilities Liabilities Current liabilities: Accounts payable Noncurrent liabilities: Note payable Total liabilities 49.950,000 199.950.000150.000.000 .672% 00% 0.0% 3.8% 319% 0.0% 00% 0.0% 0.0% 00% 217% Water Play, Inc. Revised Cash Budget December 31, 20XX Beginning cash balance Cash collections Cash available Disbursements: Material purchases Direct labor Manufacturing overhead Selling and administrative Total disbursements Excess or (Deficiency) Financing section: Borrowings Repayments Interest on long-term note Interest on short-term borrowing Financing total Ending cash balance Stockholders' Equity Common stock (\$1 par value. 25 million shares authorized, 3 million shares issued and outstanding Paid in capital Total contributed capital Retained earnings Total stockholders' equity Total liabilities and stockholders' equity December 31, 20XX Assets Currrent assets: Cash Accounts receivable Raw material inventory Finished goods inventory Total current assets Noncurrent assets: Land Buildings Equipment Less: Accumulated depreciation Iotal Noncurrent Assets Total Assets \begin{tabular}{rr} $66.618.588 & $203.406.800 \\ 175.500 .000 & 175.500 .000 \\ 13.500 .000 & 13.500 .000 \\ 34.096 .410 & 32.860 .200 \\ \hline \end{tabular} S 289.714,997 12.000 .000 72.000 .000 140.000 .000 (25.550.000) \$ 425.267 .000 12.000 .000 72.000,000 140.000 .000 (25.550.000) 198.450.000$623.717.000 Liabilities Liabilities Current liabilities: Accounts payable Noncurrent liabilities: Note payable Total liabilities 49.950,000 199.950.000150.000.000 .672% 00% 0.0% 3.8% 319% 0.0% 00% 0.0% 0.0% 00% 217%