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
