Question needs grading. Grade of 1 pt Submit GradeMist Co.docx

Question needs grading.
Grade: of 1 pt Submit Grade
Mist Company has the following post-closing trial balance on
December 31, 2016:
(See below to view the post-closing trial balance.)
The company's accounting department has gathered the
following budgeting information for the first quarter of 2017:
(See below to view the budget information.)
Additional information: Rent and income tax expenses are paid
as incurred. Insurance expense is an expiration of the prepaid
amount.
.
Requirement 1.
Prepare a budgeted income statement for the quarter ended
March 31, 2017.
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Mist Company
Budgeted Income Statement
For the Quarter Ended March 31, 2017

Gross Profit
Selling and Administrative Expenses:

Total Selling and Administrative Expenses
Operating Income (Loss)
Net Income (Loss)
Requirement 2.
Prepare a budgeted balance sheet as of March 31, 2017.
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Mist Company

Budgeted Balance Sheet
March 31, 2017
Assets
Current Assets:
Total Current Assets
Property, Plant, and Equipment
Total Assets
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Liabilities
Current Liabilities:
Total Liabilities
Stockholders' Equity
Total Stockholders' Equity
Total Liabilities and Stockholders' Equity
Requirement 3.
Prepare a budgeted statement of cash flows for the quarter
ended March 31, 2017.
Complete the three sections of the budgeted statement of cash
flows, then compute the net increase in cash and the balance at

March 31, 2017.
(Enter a use of cash with a minus sign or parentheses. If a box
is not used in the statement of cash flows leave the box empty;
do not select a label or enter a zero.)
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Mist Company
Budgeted Statement of Cash Flows
Operating Activities:

Net cash provided by (used for) operating activities
Investing Activities:
Net cash provided by (used for) investing activities
Financing Activities:
Net cash provided by (used for) financing activities

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Net increase in cash
Cash balance, January 1, 2017
Cash balance, March 31, 2017
0
Paperclip Office Supply's March 31, 2016, balance sheet
follows:
(See below to view the balance sheet.)
The budget committee of Paperclip Office Supply has assembled
the following data:
(See below to view the data.)
.
Requirement 1.
Prepare Paperclip's sales budget for April and May 2016.
Round all amounts to the nearest dollar.

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Paperclip Office Supply
Sales Budget
April and May, 2016
April
May
Total budgeted sales
Requirement 2.
Prepare Paperclip's inventory, purchases, and cost of goods sold
budget for April and May.
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Paperclip Supply Company
Inventory, Purchases, and Cost of Goods Sold Budget
April and May, 2016

April
May
Plus:
Total merchandise inventory required
Less:
Budgeted Purchases
Requirement 3.
Prepare Paperclip's selling and administrative expense budget
for April and May.
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Paperclip Office Supply
Selling and Administrative Expense Budget

April and May, 2016
April
May
Variable expenses:
Fixed expenses:
Total fixed expenses

Total selling and administrative expenses
Armand Company projects the following sales for the first three
months of the year: $10,600 in January; $12,300 in February;
and $12,900 in March. The company expects 60% of the sales to
be cash and the remainder on account. Sales on account are
collected 50% in the month of the sale and 50% in the following
month. The Accounts Receivable account has a zero balance on
January 1. Round to the nearest dollar.
Requirement 1.
Prepare a schedule of cash receipts for Armand for January,
February, and March.
What is the balance in Accounts Receivable on March 31?
(If a box is not used in the table leave it empty; do not enter a
zero.)
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Cash Receipts from Customers

January
February
March
Total
Total sales
January
February
March
Total
Cash Receipts from Customers:
Accounts Receivable balance, January 1
January—Cash sales
January—Credit sales, collection of January sales in January

January—Credit sales, collection of January sales in February
February—Cash sales
February—Credit sales, collection of February sales in February
February—Credit sales, collection of February sales in March
March—Cash sales
March—Credit sales, collection of March sales in March
Total cash receipts from customers

Accounts Receivable balance, March 31:
March—Credit sales, collection of March sales in April
Requirement 2.
Prepare a revised schedule of cash receipts if receipts from
sales on account are 60% in the month of the sale, 30% in the
month following the sale, and 10% in the second month
following the sale. What is the balance in Accounts Receivable
on March 31?
(If a box is not used in the table leave it empty; do not enter a
zero.)
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January—Credit sales, collection of January sales in February
January—Credit sales, collection of January sales in March
February—Cash sales
February—Credit sales, collection of February sales in February
February—Credit sales, collection of February sales in March
March—Cash sales
March—Credit sales, collection of March sales in March

Accounts Receivable balance, March 31:
Credit sales, collection in April and May
Requirement 1.
Prepare Grayson's operating budget and cash budget for 2017 by
quarter. Required schedules and budgets include: sales budget,
production budget, direct materials budget, direct labor budget,
manufacturing overhead budget, cost of goods sold budget,
selling and administrative expense budget, schedule of cash
receipts, schedule of cash payments, and cash budget.
Manufacturing overhead costs are allocated based on direct
labor hours.
Round all calculations to the nearest dollar.
Begin by preparing the sales budget.

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Grayson Tire Company
Sales Budget
For the Year Ended December 31, 2017
First
Second
Third
Fourth
Quarter
Quarter
Quarter
Quarter
Total
Budgeted tires to be sold
Sales price per unit

Total sales
Prepare the production budget.
Review the sales budget you prepared above.
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Production Budget
First
Second
Third
Fourth
Quarter
Quarter
Quarter
Quarter
Total

Plus:
Total tires needed
Less:
Budgeted tires to be produced
Prepare the direct materials budget.
Review the production budget you prepared above.

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Direct Materials Budget
First
Second
Third
Fourth
Quarter
Quarter
Quarter
Quarter
Total
Direct materials cost per unit

Direct materials needed for production
Plus:
Total direct materials needed
Less:
Budgeted purchases of direct materials
Prepare the direct labor budget. (Enter any hours per unit
amounts to two decimal places, X.XX, and round all other
amounts to the nearest whole number.)

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Direct Labor Budget
First
Second
Third
Fourth
Quarter
Quarter
Quarter
Quarter
Total

Direct labor hours needed for production
Budgeted direct labor cost
Prepare the manufacturing overhead budget. (Abbreviations
used: VOH = variable manufacturing overhead; FOH = fixed
manufacturing overhead.)
Review the direct labor budget you prepared above.
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Manufacturing Overhead Budget
First
Second
Third
Fourth
Quarter
Quarter
Quarter
Quarter
Total
VOH cost per tire
Budgeted VOH
Budgeted FOH

Depreciation
Utilities, insurance, property taxes
Total budgeted FOH
Budgeted manufacturing overhead costs
Direct labor hours

Budgeted manufacturing overhead costs
Predetermined overhead allocation rate
Before preparing the cost of goods sold budget, calculate the
projected manufacturing cost per tire for 2017.
(Round all amounts to the nearest cent.)
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Total projected manufacturing cost per tire for 2017
Now prepare the cost of goods sold budget.
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Cost of Goods Sold Budget
First
Second
Third
Fourth
Quarter
Quarter
Quarter
Quarter
Total

Tires produced and sold in 2017
Total budgeted cost of goods sold
Prepare the selling and administrative expense budget.
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Selling and Administrative Expense Budget
First
Second
Third
Fourth

Quarter
Quarter
Quarter
Quarter
Total
Total budgeted selling and administrative expense

Prepare the cash receipts budget. (If a box is not used in the
table leave the box empty; do not enter a zero.)
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First
Second
Third
Fourth
Quarter
Quarter

Quarter
Quarter
Total
Total sales
First
Second
Third
Fourth
Quarter
Quarter
Quarter
Quarter
Total
Accounts Receivable balance, December 31, 2016
1st Qtr.—Cash sales

1st Qtr.—Credit sales, collection of Qtr. 1 sales in Qtr. 1
1st Qtr.—Credit sales, collection of Qtr. 1 sales in Qtr. 2
2nd Qtr.—Cash sales
2nd Qtr.—Credit sales, collection of Qtr. 2 sales in Qtr. 2
2nd Qtr.—Credit sales, collection of Qtr. 2 sales in Qtr. 3
3rd Qtr.—Cash sales

3rd Qtr.—Credit sales, collection of Qtr. 3 sales in Qtr. 3
3rd Qtr.—Credit sales, collection of Qtr. 3 sales in Qtr. 4
4th Qtr.—Cash sales
4th Qtr.—Credit sales, collection of Qtr. 4 sales in Qtr. 4

Accounts Receivable balance, December 31, 2017:
4th Qtr.—Credit sales, collection of Qtr. 4 sales
in Qtr. 1 of 2018
Prepare the cash payments budget. (Round all amounts you
entered into the budget to the nearest whole dollar. If a box is
not used in the table leave the box empty; do not enter a zero.)
Review the direct materials budget you prepared above.
Review the direct labor budget you prepared above.
Review the manufacturing overhead budget you prepared above.
Review the selling and administrative expense budget you
prepared above.
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Cash Payments
First
Second
Third
Fourth
Quarter
Quarter
Quarter
Quarter
Total
Total direct materials purchases
First
Second
Third
Fourth

Quarter
Quarter
Quarter
Quarter
Total
Cash Payments
Direct Materials:
Accounts Payable balance, December 31, 2016
1st Qtr.—Qtr. 1 direct material purchases paid in Qtr. 1
1st Qtr.—Qtr. 1 direct material purchases paid in Qtr. 2

2nd Qtr.—Qtr. 2 direct material purchases paid in Qtr. 2
2nd Qtr.—Qtr. 2 direct material purchases paid in Qtr. 3
3rd Qtr.—Qtr. 3 direct material purchases paid in Qtr. 3
3rd Qtr.—Qtr. 3 direct material purchases paid in Qtr. 4
4th Qtr.—Qtr. 4 direct material purchases paid in Qtr. 4
Total payments for direct materials

Direct Labor:
Total payments for direct labor
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Manufacturing Overhead:

Total payments for manufacturing overhead

Total payments for Selling and Admin. expenses
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Income Taxes:
Total payments for income taxes
Capital Expenditures:

Total payments for capital expenditures
Total cash payments (before interest)
Accounts Payable balance, December 31, 2017:
4th Qtr.—Qtr. 4 direct material purchases

paid in Qtr. 1 of 2018
Prepare the cash budget. (Complete all input boxes. Enter a "0"
for any zero balances. Round all amounts entered into the cash
budget to the nearest whole dollar. Enter a cash deficiency,
principal repayments, and/or a net repayment on financing with
a minus sign or parentheses.)
Review the cash receipts budget you prepared above.
Review the cash payments budget you prepared above.
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Cash Budget

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First
Quarter
Beginning cash balance
Cash receipts
Cash available
Cash payments:
Capital expenditures
Purchases of direct materials
Direct labor
Manufacturing overhead
Selling and administrative expenses
Income taxes
Interest expense
Total cash payments
Ending cash balance before financing

Minimum cash balance desired
Projected cash excess (deciency)
Financing:
Borrowing
Principal repayments
Total effects of financing
Ending cash balance
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Second
Quarter

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Third
Quarter

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Fourth
Quarter

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Total

Requirement 2.
Prepare Grayson's annual financial budget for 2017, including
budgeted income statement, budgeted balance sheet, and
budgeted statement of cash flows.
Begin with the budgeted income statement. (Complete all input
boxes. Enter a "0" for any zero balances.)
Review the cost of goods sold budget you prepared above.
prepared above.
Review the cash budget you prepared above.
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Budgeted Income Statement
Sales Revenue
Cost of Goods Sold
Gross Profit
Selling and Administrative Expenses
Operating Income

Interest Expense
Income before Income Taxes
Income Tax Expense
Net Income
Prepare the budgeted balance sheet. (Round to the nearest whole
dollar.)
Review the direct materials budget you prepared above.
prepared above.
Review the cash receipts budget you prepared above.
Review the cash payments budget you prepared above.
Review the income statement you prepared above.
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Budgeted Balance Sheet
December 31, 2017
Assets

Current Assets:
Cash
Accounts Receivable
Raw Materials Inventory
Finished Goods Inventory
Total Current Assets
Property, Plant, and Equipment:
Equipment
Less: Accumulated Depreciation
Total Assets
Liabilities
Current Liabilities:
Accounts Payable

Stockholders' Equity
Common Stock, no par
Retained Earnings
Total Stockholders' Equity
Total Liabilities and Stockholders' Equity
Prepare the budgeted statement of cash flows. (Enter a use of
cash with a minus sign or parentheses. Complete all input
boxes. Enter a "0" for any zero balances.)
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Budgeted Statement of Cash Flows
Operating Activities:

Cash receipts from customers
Cash payments for operating expenses
Cash payments for interest expense
Cash payments for income taxes
Net cash provided by (used for) operating activities
Investing Activities:
Cash payments for equipment purchases
Net cash used for investing activities
Financing Activities:
Proceeds from issuance of notes payable
Payment of notes payable
Net cash provided by financing activities

Net increase in cash
Cash balance, January 1, 2017
Cash balance, December 31, 2017
Requirement 1.
Prepare Sosa Company's schedule of cash receipts from
customers and schedule of cash payments for the first quarter of
2016.
Begin by preparing the schedule of cash receipts from
customers for the first quarter of 2016.
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First Quarter
2016

Total sales
Accounts Receivable balance, December 31, 2015
1st Qtr.—Sales
Accounts Receivable balance, March 31, 2016:
1st Qtr.—Sales, collected in 2nd Qtr.
Prepare the schedule of cash payments for the first quarter of
2016.
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Cash Payments
First Quarter
2016

Total direct materials purchases
Cash Payments
Direct Materials:
Accounts Payable balance, December 31, 2015
1st Qtr.—Direct material purchases
Total payments for direct materials
Direct Labor:
Total payments for direct labor
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Manufacturing Overhead:

Total payments for manufacturing overhead
Total payments for Selling and Admin. expenses
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Income Taxes:
Total payments for income taxes

Capital Expenditures:
Total payments for capital expenditures
Total cash payments
Accounts Payable balance, March 31, 2016
1st Qtr.—Direct materials purchases, paid in 2nd Qtr.
Requirement 2.
Prepare Sosa Company's cash budget for the first quarter of
2016.
Review the schedule of cash receipts from customers you
prepared in Requirement 1.
Review the schedule of cash payments you prepared in
Requirement 1.
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Sosa Company
Cash Budget
Beginning cash balance

Cash receipts
Cash available
Cash payments:
Purchases of direct materials
Direct labor
Manufacturing overhead

Selling and administrative expenses
Income taxes
Capital expenditures
Total cash payments
Ending cash balance

a.
Capital expenditures include $36,000 for new manufacturing
equipment to be purchased and paid in the first quarter.
b.
Cash receipts are 60% of sales in the quarter of the sale and 40
% in the quarter following the sale.
c.
Direct materials purchases are paid 70% in the quarter
purchased and 30% in the next quarter.
d.
Direct labor, manufacturing overhead, and selling and
administrative costs are paid in the quarter incurred.
e.
Income tax expense for the first quarter is projected at $42,000
and is paid in the quarter incurred.
f.
Sosa Company expects to have adequate cash funds and does
not anticipate borrowing in the first quarter.
g.
The December 31,2015, balance in Cash is $14,000, in Accounts
Receivable is $23,200,
and in Accounts Payable is $10,500
Total sales
$297,500
Budgeted purchases of direct materials
39,450

Budgeted direct labor cost
38,880
Budgeted manufacturing overhead costs:
Variable manufacturing overhead
3,645
Depreciation
600
Insurance and property taxes
9,120
Budgeted selling and administrative expenses:
Salaries expense
5,000
Rent expense
3,000
Insurance expense
1,200
Depreciation expense
100
Supplies expense
2,975

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