Explanations for each balance are as follows: • Cash: Ending balance per the cash budget. • Accounts receivable: 30% of fourth quarter sales ($600,000 × 30%). • Finished goods inventory: 2,475 units (15% of next quarter's sales of 16,500) times $11.25 per unit cost. See production budget and cost of goods sold calculation for further information. • Raw materials inventory: Materials for 1,683 units (10% of next quarter's production of 16,830 units) times $1.40 per unit cost of materials. See direct materials budget and cash budget for units and costs. • Land : Sale of land with a cost of $15,000 (per cash budget information) deducted from beginning balance of $45,000. • Building: No activity during the year. • Equipment: Beginning balance of $60,000 plus purchases totaling $76,000. • Accumulated depreciation: Beginning balance of $50,000 plus $15,200 additional
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