Financial Managerial Accounting: E22-31 Berkson, Inc. has the following balance sheet

Financial Managerial Accounting
E22-31 Preparing the financial budget - budgeted balance sheet
Berkson, Inc. has the following balance sheet at December 31, 2016:
Berkson, Inc.
Balance Sheet
December 31, 2016
Assets
Current Assets:
Cash 2,100
Accounts Receivable 900
Raw Materials Inventory 900
Finished Goods Inventory 1,650
Total Current Assets 5,550
Property, Plant and Equipment;
Equipment 17,000
Less: Accumulated Depreciation (3,500) 13,500
Total Assets $19,050
Current Liabilities:
Accounts Payable 1,400
Stockholders' Equity
Common Stock, no par 7,000
Retained Earnings 10,650
Total Stockholders' Equity 17,650
Total Liabilities and Stockholders' Equity $19,050

Berkson projects the following transactions for 2017:
Sales on account, $21,000
Cash receipts from customers from sales on account, $15,800
Purchase of raw materials on account, $2,000
Payments on account, $2,000

Total cost of completed products, $15,150, which includes the following:
Raw materials used, $2,000
Direct labor costs incurred and paid, $5,800
Manufacturing overhead costs incurred and paid, $6,500
Depreciation on manufacturing equipment, $850
Cost of goods sold, $16,300
Selling and administrative costs incurred and paid, $1,000
Purchase of equipment, paid in 2017, $1,900

Prepare a budgeted balance sheet for Berkson, Inc. for December 31, 2017.
Hint: It may be helpful to trace the effects of each transaction on the accounting equation to determine the ending balance of each account.
Powered by