Year 1 Transaction List: 1. Acquired $550,000 by signing a note payable with a local bank on Jan 1. 2. Sold 25,000 shares of $22 par value Common Stock for $1,500,000 3. Purchased Equipment for $300,000 cash 4. Purchased 25,000 Units of Inventory on Account at $1.15 per unit 5. Sold 15,000 units at $3.50 on Account 6. Collected $70,000 of accounts receivable 7. Paid $17.250 of Accounts Payable 8. Purchased 170,000 units of Inventory on Account at $1.50 per unit 9. Sold 175,000 units at $3.50 on Account 10. Collected $472,500 of accounts receivable 11. Paid $118.600 of Accounts Payable 12. Purchased 275.000 Units of Inventory on Account at $1.35 per unit 13. Sold 200,000 units at $3.50 on Account 14. Collected $735,000 of accounts receivable 15. Paid $294,150 of Accounts Payable 16. Purchased 300,000 Units of Inventory on Account at $1.15 per unit 17. Record Sales & Marketing Expenses of $30,000 (paid in cash) 18. Record Operating Expenses of $75.708 (paid in cash) 19. Record Wage Expenses of $40,000 (paid in cash) 20. Record Product Line Research & Development Expenses of $150,000 (paid in cash) 21. Record Advertising Expenses of $87.500 (paid in cash) 22. Made the yearly required payment on the note payable. The note carries a 7% interest rate and requires payments of $50,000 plus interest each December 31. 23. Record Year 1 Depreciation on Equipment with Salvage Value of $38,000 and useful life of 7 Years (straight-line depreciation) 24. Declared a $10,000 cash dividend for stockholders 25. Paid a $10,000 cash dividend for stockholders Goods Available for Sale Price/ Units Unit Total Cost of Goods Sold Price/ Units Unit Total Ending Inventory Price/ Units Unit Total Beg Bal Purchases: Total NOTE: You will need to calculate your estimated COGS for the budget template tab using the Weighted Avergae method discussed in L05-6 Flexible Budget Master Budget at Actual Units Sold in Year 1 Actual Units Sold + 25,000 Actual Units Sold + 50,000 Sales Revenue Cost of Goods Sold Gross Profit Operating Expenses Sales & Marketing Operating Costs Wages Research & Development Expense Advertising Expense Depreciation Exp Interest Expense Net Income Inventory Production Beginning Inventory "use ending inventory from CORRECTED horizontal balance sheet for beginning inventory for the purchases + Purchases - Estimated COGS = Desired Ending *actual units at weighted average COGS/unit Wages Research & Development Expense Advertising Expense Depreciation Exp Interest Expense Net Income Inventory Production Beginning Inventory *use ending inventory from CORRECTED horizontal balance sheet for beginning inventory for the purchases + Purchases Estimated COGS = Desired Ending *actual units at weighted average COGS/unit Purchases = Note: Calculate next year's estimated purchases for desired ending inventory of $35,000, assuming your ending inventory from the horizontal balance sheet is your beginning inventory for the next year. For Estimated COGS, use the previously calculated weighted average COGS and last years actual units Breakeven Calcuation BE = FC/(CM/Unit) $ 9 1 Income Statement 2 Year 1 3 Sales Revenue 5 Less: Cost of Goods Sold 6 Gross Margin 7 8 Less: Expenses Sales & Marketing 10 Operating Costs 11 Wages 12 Research & Development Expense 13 Advertising Expense 14 Depreciation Expense 15 Interest Expense 16 Total Operating Expenses 17 18 Net Income (Loss) 19 20 $ $ 21 22 23 24 25 26
