| Answer 1. Budgeted statement of cost of goods sold |
| | | Comfort Furniture |
| | | Budgeted cost of goods sold |
| | for the year ending December 31, 2017 |
| Finished goods inventory, 1/1/17 | | 24000 |
| Cost of goods manufactured |
| Direct Material used | 62500 |
| Direct Labor | 50900 |
| Manufacturing Overhead Applied | 48600 | 162000 |
| Cost of goods available for sale | | 186000 |
| Less: Finished goods inventory, 31/12/17 (2500 units @ $18) | | 45000 |
| Cost of goods sold | | 141000 |
| Answer 2. Budgeted multiple-step income statement |
| | | Comfort Furniture |
| | | Budgeted income statement |
| | | For the year ending December 31, 2017 |
| Sales Revenue | | 256000 |
| Less: COGS | | 141000 |
| Gross Profit | | 115000 |
| Less: Selling and Admin Expenses | | 75000 |
| Income from operations | | 40000 |
| Less: Interest Expense | | 3500 |
| Income before taxes | | 36500 |
| Less: Tax @ 40% | | 14600 |
| Net income | | 21900 |
| Answer 3.Retained earnings statement for 2017 |
| | | | Comfort Furniture |
| | | | Budgeted Retained Earning Statement |
| | | | For the year ending on December 31, 2017 |
| Retained Earnings, 1/1/17 | | 25000 |
| Add: Net income | | 21900 |
| | | 46900 |
| Less: Dividends | | 8000 |
| Retained Earnings 31/12/2017 | | 38900 |
| Answer 4. Budgeted classified balance sheet at December 31,2017 |
| | Comfort Furniture PTY Ltd |
| | Balance Sheet as on 31st December, 2017 |
| Assets |
| Current Assets |
| Cash | 5880 |
| Accounts receivable | 30720 |
| Finished goods inventory (1500 units) | 45000 |
| Total current assets | | 81600 |
| Property, plant and equipment |
| Equipment | 49000 |
| Less: Accumulated depreciation | 14000 |
| Total Property, plant and equipment | | 35,000 |
| Total Assets | | 116,600 |
| Total liabilities and stockholders’ equity |
| Liabilities |
| Notes payable | 17000 |
| Accounts payable | 15700 |
| Total Liabilities | 5000 | 37700 |
| Stockholders’ Equity |
| Common stock | 40000 |
| Retained earnings | 38900 |
| Total stockholders’ equity | | 78900 |
| Total liabilities and stockholders’ equity | | 116,600 |
| Answer 5. Budgeted classified balance sheet at December 31,2017 |
| | Comfort Furniture PTY Ltd |
| | Statement of budgeted cash balance |
| | Amounts |
| Opening Cash Balance | 7500 |
| Add: Cash collected from receivables | 298780 |
| Less: Cash paid for direct meterial | 91800 |
| Less: Equipment Purchase | 9000 |
| Less: Dividend | 8000 |
| Less: Notes payable paid | 8000 |
| Less: Interest payment | 3500 |
| Less: Taxes paid | 9600 |
| Less: Direct Labor | 50900 |
| Less: Selling and administrative expenses (Less of depreciation included) | 73000 |
| Less: Manufacturing overheads (Less of depreciation included) | 46600 |
| Closing balance of cash | 5,880 |
| Notes |
| Cash collected from receivables = Opening balance of accounts receivable + sales made- closing balance of AR |
| 73500+256000-(76800*40%) |
| 298780 |
| Cash paid to direct meterial= Opening balance of AP + Direct meterial- closing balance of AP |
| 45000+62500-(7200+(17000*50%)) |
| 91800 |
| Answer 2 (a).primary benefits of budgeting |
| 1. Budgeting helps in guide the administration identifying with its future planning and formulation of policies. |
| 2. Through budgeting substance can control its money related issues effectively. |
| 3. Budgeting spares the pressure of all of a sudden changing in accordance with lack of funds since you didn't at first arrangement how to spend them. |
| 4. Budgeting is utilized to assess the strategies and objectives of an organization. Additionally, such approaches and objectives are tried with the assistance of budgetary control. |
| 5. Budgeting helps in coordinating both capital and revenue resources in a profitable way. |
| 6. If an organization has limited liquid assets available to put resources into fixed assets and working capital and the budgeting procedure forces the management to choose which resources are most worth putting resources into. |
| 7. At the point when the organization make budget and take a "major picture" view, it will see potential cash issues ahead of time, and have the option to make modifications before the issue shows up. |
| 8. Taking loan isn't really a terrible thing if the loan is fundamental or organization can manage the cost of it. Budgeting demonstrates how much an loan load organization can reasonably take without being pushed or if taking the loan burden is justified, despite all the trouble. |
| 9. Budgeting, helps to recognizes and take out unnecessary spending like late charges, punishments and interests. These apparently little sparing can include after some time. |
arju308
MGTAccAssesstent1.xlsx
