University:
Grand Rapids Community College
Course:
Financial and Managerial Accounting: Information for Decisions - John J. Wild
Academic year:

2024
Views:

472

Pages:

2
Author:

stud_ice13

To prepare the budgeted financial statements, we will start with the Budgeted Income Statement and then proceed to the Budgeted Balance Sheet for Garcia Company. These financial statements provide an overview of expected financial performance and position based on the master budget. Budgeted Income Statement for Garcia Company The budgeted income statement shows the expected revenue, expenses, and net income for the period. Using the data from the cash budget and any other budgeted amounts, we will estimate Garcia Company’s financial performance. Budgeted Income Statement Particulars Amount ($) $132,000 Sales Revenue Less: Cost of Goods Sold (COGS) Direct Materials $63,500 Direct Labor $33,400 Factory Overhead $8,180 Total COGS $105,080 Gross Profit $26,920 Operating Expenses Selling & General Admin Expenses $8,000 Total Operating Expenses $8,000 Operating Income $18,920 Less: Interest Expense Income Before Taxes Less: Income Taxes (40%) Net Income $20 $18,900 $7,560 $11,340 Budgeted Balance Sheet for Garcia Company The balance sheet provides a snapshot of the company’s financial position at the end of the period. It includes assets, liabilities, and equity balances. Budgeted Balance Sheet Assets Current Assets Cash (Ending Balance) Amount ($) $30,000 Assets Accounts Receivable Inventory Total Current Assets Amount ($) $0 $50,000 $80,000 Fixed Assets Property, Plant & Equipment $120,000 Less: Accumulated Depreciation ($20,000) Net Fixed Assets $100,000 Total Assets $180,000 Liabilities and Equity Current Liabilities Accounts Payable Short-term Loans Payable Total Current Liabilities $30,000 $0 $30,000 Equity Common Stock Retained Earnings Total Equity $100,000 $50,000 $150,000 Total Liabilities & Equity $180,000 Conclusion: • • • Net Income: Garcia Company’s budgeted net income for the period is projected to be $11,340. Ending Cash Balance: The cash balance at the end of January is projected to be $30,000, ensuring the company meets its minimum cash requirement. Total Assets: Total assets are expected to amount to $180,000, balanced by liabilities and equity at the same level. This set of budgeted financial statements provides an overview of the company’s expected financial performance and helps in planning for future needs, ensuring liquidity and profitability.