PLEASE SHOW SOLUTIONS. THERE IS NOT A RATE OF DEPRECIATION LISTED. I\'M GUESSING
ID: 2549153 • Letter: P
Question
PLEASE SHOW SOLUTIONS.
THERE IS NOT A RATE OF DEPRECIATION LISTED. I'M GUESSING YOU WOULD SOMEHOW TAKE THE DEPRECIATION AND DIVIDE IT BY 12 AND THEN DIVIDE IT BY THE QUARTERLY AMOUNT?
Exercise 5-30 Bill Thomas, Vaughn & Hill's controller, has received all the budgets prepared by the various operating units and is ready to compile the pro-forma financial statements for the first quarter. The company's balance sheet of December 31 is as follows: Cash Accounts Receivable (net) Finished Goods Inventory Raw Materials Inventory Property, Plant & Equipment Accumulated Depreciation $50,400 49,140 11,160 6,350 252,000 (63,000 5336,050 $15,120 63,218 84,000 173,712 Total Liabilities & Owners Equity 336,050 Total Assets Accounts Payable Income Tax Payable Common Stock Retained Earnings Selected Estimates Budgeted revenue Selling and administrative expense Interest expense Cash Cost of Goods Sold Accounts recelvable (net) Direct materials Finished goods Acounts payable Notes payable Quarter $1,184,400 223,776 2,839 25,851 842,831 114,660 4,670 49,573 7,888 34,440Explanation / Answer
Vaughn & Hill Income Statement First Quarter Revenue $ 1184400 Cost of goods sold 842831 Gross profit 341569 Selling and administrative expense 223776 Operating income 117793 Interest expense 2839 Income before income tax 114954 Income tax expense 28739 Net income $ 86215 Vaughn & Hill Balance Sheet March 31 Cash 25851 Accounts receivable (net) 114660 Finished goods inventory 49573 Raw materials inventory 4670 Property, plant & equipment (252000 + 60480 + 50400) 362880 Accumulated depreciation [63000 + 3 x (25200 + 8400)] -163800 Total assets $ 393834 Accounts payable 27888 Income tax payable 28739 Notes payable 34440 Common stock 84000 Retained earnings (173712 + 86215 - 41160) 218767 Total liabilities and owner's equity 393834