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ACC 556 Week 6 Problem Cost of Goods Manufactured,Proforma Income & Balance sheet Solution(Duncan Company)

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Proforma Statements;NOTE: It is expected that this problem will be completed using an Excel spreadsheet using formulas.;Please see the Excel Tutorial that is available under the course home tab.;The Duncan Company has just completed a number of budgets for the coming year. The cost of goods;manufactured schedule, the proforma income statement and the balance sheet still have to be completed.;The following information is available;Prior year Balance Sheet;Cash;$35,000;Accounts Payable;$98,000;Accounts Receivable;45,000;Other Current Liabilities;39,000;Materials Inventory;35,000;Income Taxes Payable;21,000;WIP Inventory;25,000;Finished Goods Inventory;32,000;Long-Term Debt;250,000;Prepaid Expenses;15,000;Plant and Equipment;450,000;Common Stock;100,000;Accumulated Depreciation;(120,000);Retained Earnings;27,000;Other Assets;18,000;Total Assets;$535,000;Total Liab. & Equity;$535,000;Information from recent budgets for the coming year;1. Projected sales are $1,800,000 (12,690 units);2. Projected direct material purchases are $500,000;3. Projected direct material usage is $495,000;4. Projected direct labor expense is $400,000;5. Projected overhead is $380,000;6. Projected selling expenses are $120,000;7. Projected administrative expenses are $300,000;8. Projected cash collections are $1,785,000;9. Projected payments for materials (accounts payable) are $520,000;10. Projected payments for other operating expenses (other current liabilities) are $1,130,000;11. Projected depreciation expense is $55,000 and is already included in mfg overhead;Additional information that is available;1. The expected tax rate is 35%;2. The company is planning a stock issue of $25,000;3. Income taxes are paid 3 months after the year-end;4. The company anticipates purchasing a new patent for $10,000 during the year.;5. WIP inventory is expected to decrease by $2,000;6. Finished goods inventory is expected to increase by $8,000;7. Due to insurance rate increases, it is expected that prepaid expenses will increase by $3,000;Investment information;1. A purchase of additional equipment for $75,000 is expected on January 1 st.;2. The purchase will be made using $50,000 cash and long-term debt will be increased by $25,000;Long-Term Debt information;1. All long-term debt will have an 8% annual rate.;2. A payment of $50,000 including BOTH principle and interest will be made on December 31 st.;Required: Prepare a cost of goods manufactured schedule, a proforma income statement and proform a balance sheet.

 

Paper#74863 | Written in 18-Jul-2015

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