Question

Need help with the second part! Please!

Sosa Company has the following post-closing trial balance on December 31, 2018 E (Click the icon to view the post-closing trial balance.) The company's accounting department has gathered the following budgeting information for the first quarter of 2019 E (Click the icon to view the budgeting information.) Additional information: a. Direct materials purchases are paid 70% in the quarter purchased and 30% in the next quarter, b. Direct labor, manufacturing overhead, selling and administrative costs, and income tax expense are paid in the quarter incurred. C. Accounts payable at December 31, 2018 are paid in the first quarter of 2019. Read the requirements Data Table Requirement 1. Prepare Sosa Company's budgeted income statement for the first quarter of 2019. Requirements 1. Prepare Sosa Company's budgeted income statement for the first quarter of 2019. 2. Prepare Sosa Company's budgeted balance sheet as of March 31, 2019. Credit Sosa Company Budgeted Income Statement For the Quarter Ended March 31, 2019 Sales Revenue $ 309,500 Cost of Goods Sold 71,200 Gross Profit 238,300 Selling and Administrative Expenses 24,785 Income before Income Taxes 213,515 Income Tax Expense 47,000 166,515 Net Income Done Sosa Company Post-Closing Trial Balance December 31, 2018 Account Debit Cash 20,000 Accounts Receivable 20,300 Raw Materials Inventory 7,000 Finished Goods Inventory 26,000 Equipment 110,000 Accumulated Depreciation Accounts Payable Common Stock Retained Earnings $ 183,300 $ Totals Requirement 2. Prepare Sosa Company's budgeted balance sheet as of March 31, 2019. 25,000 10,500 100,000 47,800 Sosa Company Budgeted Balance Sheet March 31, 2019 183,300

Answer 1

Requirement 2.

Sosa Company Budgeted Balance Sheet March 31, 2019
Assets
Current Assets:
Cash (W.N 1)	129,365
Accounts Receivable (W.N 2)	65,800
Raw Materials Inventory	7,000
Finished goods Inventory (W.N 3)	3,650
Total Current Assets		205,815
Property, Plant and Equipment:
Equipment (W.N 4)	144,000
Less: Accumulated Depreciation (W.N 6)	26,200	117,800
Total Assets		323,615
Liabilities
Current Liabilities:
Accounts Payable (W.N 5)		9,300
Stockholders’ equity
Common Stock	100,000
Retained Earnings (W.N 7)	214,315
Total Stockholders’ equity		314,315
Total Liabilities and Stockholders’ equity		323,615

Working Notes (W.N 1):

1.

Cash Account
Particular	Debit	Credit	Balance
Balance December 31,2018			20,000 Dr
Budgeted Cash receipt from customer	264,000		284,000 Dr
Accounts Payable of December 31,2018		10,500	273,500 Dr
Budgeted Direct Material paid (31,000*70%)		21,700	251,800 Dr
Budgeted Direct Labor cost		13,500	238,300 Dr
Budgeted variable Manufacturing Overhead		2,600	235,700 Dr
Budgeted Insurance and property taxes		1,050	234,650 Dr
Budgeted Salaries expenses		8,000	226,650 Dr
Budgeted Rent Expenses		5,000	221,650 Dr
Budgeted Insurance expenses		2,000	219,650 Dr
Budgeted Supplies expenses		9,285	210,365 Dr
Budgeted Income tax paid		47,000	163,365 Dr
Budgeted Capital expenditure (additional equipment)		34,000	129,365 Dr

2.

Account Receivable Account
Particular	Debit	Credit	Balance
Balance December 31,2018			20,300 Dr
Budgeted Sales on account	309,500		329,800 Dr
Budgeted Cash receipt from customer		264,000	65,800 Dr

3.

Finished goods Inventory
Particular	Debit	Credit	Balance
Balance December 31,2018			26,000 Dr
Budgeted Direct Material	31,000		57,000 Dr
Budgeted Direct Labor cost	13,500		70,500 Dr
Budgeted variable Manufacturing Overhead	2,600		73,100 Dr
Budgeted Insurance and property taxes	1,050		74,150 Dr
Budgeted Manufacturing Depreciation	700		74,850 Dr
Budgeted cost of goods sold		71,200	3,650 Dr

4.

Equipment Account
Particular	Debit	Credit	Balance
Balance December 31,2018			110,000 Dr
Budgeted Capital expenditure (additional equipment)	34,000		144,000 Dr

5.

Accounts Payable Account
Particular	Debit	Credit	Balance
Balance December 31,2018		10,500	10,500 Cr
Budgeted Direct Materials (31,000*30%)		9,300	19,800 Cr
Cash Paid	10,500		9,300 Cr

6.

Accumulated Depreciation Account
Particular	Debit	Credit	Balance
Balance December 31,2018		25,000	25,000 Cr
Budgeted Manufacturing Depreciation		700	25,700 Cr
Budgeted Selling and Administrative Depreciation		500	26,200 Cr

7.

Retained Earnings Account
Particular	Debit	Credit	Balance
Balance December 31,2018		47,800	47,800 Cr
Net Income transfer		166,515	214,315 Cr