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Exercise 9-9 (20 minutes)
Academic Copy
Budgeted Balance Sheet
Assets
Current assets:
Cash* ................................................
$ 4,400
Accounts receivable ............................
6,500
Supplies inventory ..............................
2,100
Total current assets ..............................
$13,000
Plant and equipment:
Equipment .........................................
28,000
Accumulated depreciation ...................
(9,000)
Plant and equipment, net ......................
19,000
Total assets ..........................................
$32,000
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable ...............................
$ 1,900
Stockholders' equity:
Common stock ...................................
$ 4,000
Retained earnings# ............................
26,100
Total stockholders' equity ......................
30,100
Total liabilities and stockholders' equity ..
$32,000
* Plug figure.
# Retained earnings is computed as follows:
Retained earnings, beginning balance ..
$21,000
Add net income ..................................
8,600
29,600
Deduct dividends ................................
3,500
Retained earnings, ending balance ......
$26,100
Exercise 9-14 (continued)
3.
Colerain Corporation
Income Statement
For the Quarter Ended September 30
Sales ($200,000 + $220,000 + $210,000) ..
$630,000
Cost of goods sold (Part 2a) .....................
409,500
Gross margin ............................................
220,500
Selling and administrative expenses
($65,000 × 3 months) ...........................
195,000
Net operating income................................
25,500
Interest expense ......................................
0
Net income ..............................................
$ 25,500
4.
Colerain Corporation
Balance Sheet
September 30
Assets
Cash
($80,000 + $609,000 – $407,550 – ($60,000 × 3))
$101,450
Accounts receivable ($210,000 × 70%) .....................
147,000
Inventory (Part 2a) ...................................................
59,800
Plant and equipment, net ($200,000 – ($5,000 ×3)) ...
185,000
Total assets ..............................................................
$493,250
Liabilities and Stockholders’ Equity
Accounts payable ($141,700 × 50%) .........................
$ 70,850
Capital stock (Given).................................................
300,000
Retained earnings ($96,900 + $25,500) .....................
122,400
Total liabilities and stockholders’ equity ......................
$493,250
