BA102B_2006_Spring_MT3 Solutions_Geyer

BA102B_2006_Spring_MT3 Solutions_Geyer - Budgeted Income...

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Unformatted text preview: Budgeted Income Statement for 2006 Sales $300,000 Cost of goods sold $210,000 Gross profit $90,000 Selling, general & administrative $36,000 Income before taxes $54,000 Income tax (40%) $21,600 Net income $32,400 Balance Sheet Data at December 31, 2005 Plant & equipment (net) $150,000 Common stock $200,000 Retained earnings $83,000 Known Asset Requirements on December 31, 2006 Cash (minimum desired balance) $25,000 Accounts receivable 30% of sales Inventory 30% of COGS Plant & equipment (net) $210,000 LHD 7.35 Caldwell Company 1. Tota Asset Requirements & Total Available Equities Asset Requirements Cash $25,000 Accounts receivable $90,000 (30% x $300,000) Inventory $63,000 (30% x $210,000) Plant & equipment (net) $210,000 Total asset requirements $388,000 Available Equities Accounts payable $31,500 (50% x $63,000) Income taxes payable $10,800 (50% x $21,600) Common stock $200,000 Retained earnings $93,400 ($83,000 + $32,400 - $22,000) Total available equities $335,700 2. Long-Term Debt Requirement...
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BA102B_2006_Spring_MT3 Solutions_Geyer - Budgeted Income...

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