Question

Gig Harbor Boating is the wholesale distributor of a small recreational catamaran sailboat. Management has prepared the following summary data to use in its annual budgeting process: Budgeted unit sales Selling price per unit Cost per unit Variable selling and administrative expense (per unit) Fixed selling and administrative expense (per year) Interest expense for the year 780 S2, 110 $ 1,615 $ 55 $ 300,000 $ 27,000 Required: Prepare the company's budgeted income statement for the year. Gig Harbor Boating Budgeted Income Statement

Answer 1

Gig Harbor Boating Budgeted Income statement Sales $1,645,800 Less Cost of goods sold $1,259,700 Gros margin $ 386,100 less: Selling and administrative expenses. $342,900 $ 43,200 Met operating income Less? Interest expense $ 27,000 Met Income $ 16,00 Calculation? sales = (Budgeted unit sales & selling Price Per Unit). Sales = 700 units X $2,110 - $1,645,800 cost of goods sold = Units sold & cost per unit - 780 units & $1,615 = $1,259,700 Selling and administrative expense = (Budgeted unit sales x variable selling and administrative expense per unit) + fixed selling and Administrative expense] = |(780 x $55) + $ 300,000] = $42,900 & $300,000 = $342,900

sheet Mecca Copy & Balance Assets Current Assets : Cash Accounts Receivable suppries inventory $18,200 $ 8,500 $ 4,700 $31,400 Total current assets. Plant and equipment: Equipment Accumulated depreciation $ 36,000 $(14,600) Plant and equipment, net. $ 21,400 Total assets $ 52,800 ,200 Liabilities and stockholders' equity Current liabilities : Accounts Payable stockholders equity : Common Stock Retained Earnings $5,000 $ 45, 600 Total stockhoblers' equity $50,600 Total liabilities and stockholders equity $ 52,800

Calculation: Retained earnings, ending balance = (Beginning Balance of Retained Earnings of Net Income - Dividends) = ($32,000+ $ 16,300 - $2,700) = $ 45,600 Cash – Plug figure Total liabilities and stockholderi equity = $52,800 Cash (Total liabilities and stockholdersequity - Plant and equipment, net - Accounts Receivable - Geppuies Inventory) = $52,000 - $21,400 - $8,00 - $4,700 $ 18,200