See Description.... Needed ASAP
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Prepare Grayson's operating budget and cash budget for 2017 by quarter. Required schedules and budgets include: sales budget, production budget, direct materials budget, direct labor budget, manufacturing overhead budget, cost of goods sold budget, selling and administrative expense budget, schedule of cash receipts, schedule of cash payments, and cash budget. Manufacturing overhead costs are allocated based on direct labor hours.
Round all calculations to the nearest dollar.
Begin by preparing the sales budget.
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Grayson Tire Company |
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Sales Budget |
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For the Year Ended December 31, 2017 |
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Quarter |
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Budgeted tires to be sold |
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Sales price per unit |
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Total sales |
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Prepare the production budget.
Review the sales budget you prepared above.
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Grayson Tire Company |
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Production Budget |
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For the Year Ended December 31, 2017 |
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Quarter |
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Total |
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Plus: |
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Total tires needed |
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Less: |
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Budgeted tires to be produced |
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Prepare the direct materials budget.
Review the production budget you prepared above.
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Grayson Tire Company |
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Direct Materials Budget |
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For the Year Ended December 31, 2017 |
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Quarter |
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Quarter |
Total |
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Direct materials cost per unit |
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Direct materials needed for production |
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Plus: |
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Total direct materials needed |
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Less: |
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Budgeted purchases of direct materials |
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Prepare the direct labor budget. (Enter any hours per unit amounts to two decimal places, X.XX, and round all other amounts to the nearest whole number.)
Review the production budget you prepared above.
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Grayson Tire Company |
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Direct Labor Budget |
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For the Year Ended December 31, 2017 |
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Quarter |
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Total |
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Direct labor hours needed for production |
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Budgeted direct labor cost |
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Prepare the manufacturing overhead budget. (Abbreviations used: VOH = variable manufacturing overhead; FOH = fixed manufacturing overhead.)
Review the production budget you prepared above.
Review the direct labor budget you prepared above.
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Grayson Tire Company |
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Manufacturing Overhead Budget |
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For the Year Ended December 31, 2017 |
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First |
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Fourth |
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Quarter |
Quarter |
Quarter |
Quarter |
Total |
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VOH cost per tire |
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Budgeted VOH |
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Budgeted FOH |
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Depreciation |
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Utilities, insurance, property taxes |
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Total budgeted FOH |
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Budgeted manufacturing overhead costs |
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Direct labor hours |
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Budgeted manufacturing overhead costs |
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Predetermined overhead allocation rate |
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Before preparing the cost of goods sold budget, calculate the projected manufacturing cost per tire for 2017.
(Round all amounts to the nearest cent.)
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Total projected manufacturing cost per tire for 2017 |
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Now prepare the cost of goods sold budget.
Review the sales budget you prepared above.
Review the production budget you prepared above.
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Grayson Tire Company |
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Cost of Goods Sold Budget |
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For the Year Ended December 31, 2017 |
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First |
Second |
Third |
Fourth |
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Quarter |
Quarter |
Quarter |
Quarter |
Total |
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Tires produced and sold in 2017 |
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Total budgeted cost of goods sold |
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Prepare the selling and administrative expense budget.
Review the sales budget you prepared above.
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Save Accounting Table... |
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Grayson Tire Company |
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Selling and Administrative Expense Budget |
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For the Year Ended December 31, 2017 |
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First |
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Third |
Fourth |
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Quarter |
Quarter |
Quarter |
Quarter |
Total |
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Total budgeted selling and administrative expense |
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Prepare the cash receipts budget. (If a box is not used in the table leave the box empty; do not enter a zero.)
Review the sales budget you prepared above.
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Cash Receipts from Customers |
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First |
Second |
Third |
Fourth |
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Quarter |
Quarter |
Quarter |
Quarter |
Total |
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Total sales |
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First |
Second |
Third |
Fourth |
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Quarter |
Quarter |
Quarter |
Quarter |
Total |
Cash Receipts from Customers: |
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Accounts Receivable balance, December 31, 2016 |
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1st Qtr.—Cash sales |
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1st Qtr.—Credit sales, collection of Qtr. 1 sales in Qtr. 1 |
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1st Qtr.—Credit sales, collection of Qtr. 1 sales in Qtr. 2 |
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2nd Qtr.—Cash sales |
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2nd Qtr.—Credit sales, collection of Qtr. 2 sales in Qtr. 2 |
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2nd Qtr.—Credit sales, collection of Qtr. 2 sales in Qtr. 3 |
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3rd Qtr.—Cash sales |
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3rd Qtr.—Credit sales, collection of Qtr. 3 sales in Qtr. 3 |
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3rd Qtr.—Credit sales, collection of Qtr. 3 sales in Qtr. 4 |
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4th Qtr.—Cash sales |
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4th Qtr.—Credit sales, collection of Qtr. 4 sales in Qtr. 4 |
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Total cash receipts from customers |
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Accounts Receivable balance, December 31, 2017: |
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4th Qtr.—Credit sales, collection of Qtr. 4 sales |
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in Qtr. 1 of 2018 |
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Prepare the cash payments budget. (Round all amounts you entered into the budget to the nearest whole dollar. If a box is not used in the table leave the box empty; do not enter a zero.)
Review the direct materials budget you prepared above.
Review the direct labor budget you prepared above.
Review the manufacturing overhead budget you prepared above.
Review the selling and administrative expense budget you prepared above.
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Cash Payments |
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First |
Second |
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Fourth |
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Quarter |
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Quarter |
Total |
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Total direct materials purchases |
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First |
Second |
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Fourth |
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Quarter |
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Quarter |
Total |
Cash Payments |
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Direct Materials: |
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Accounts Payable balance, December 31, 2016 |
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1st Qtr.—Qtr. 1 direct material purchases paid in Qtr. 1 |
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1st Qtr.—Qtr. 1 direct material purchases paid in Qtr. 2 |
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2nd Qtr.—Qtr. 2 direct material purchases paid in Qtr. 2 |
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2nd Qtr.—Qtr. 2 direct material purchases paid in Qtr. 3 |
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3rd Qtr.—Qtr. 3 direct material purchases paid in Qtr. 3 |
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3rd Qtr.—Qtr. 3 direct material purchases paid in Qtr. 4 |
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4th Qtr.—Qtr. 4 direct material purchases paid in Qtr. 4 |
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Total payments for direct materials |
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Direct Labor: |
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Total payments for direct labor |
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Save Accounting Table... |
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Copy to Clipboard... |
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Manufacturing Overhead: |
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Total payments for manufacturing overhead |
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Selling and Administrative Expenses: |
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Total payments for Selling and Admin. expenses |
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Save Accounting Table... |
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Income Taxes: |
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Total payments for income taxes |
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Capital Expenditures: |
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Total payments for capital expenditures |
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Total cash payments (before interest) |
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Accounts Payable balance, December 31, 2017: |
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4th Qtr.—Qtr. 4 direct material purchases |
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paid in Qtr. 1 of 2018 |
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Prepare the cash budget. (Complete all input boxes. Enter a "0" for any zero balances. Round all amounts entered into the cash budget to the nearest whole dollar. Enter a cash deficiency, principal repayments, and/or a net repayment on financing with a minus sign or parentheses.)
Review the cash receipts budget you prepared above.
Review the cash payments budget you prepared above.
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Save Accounting Table... |
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Copy to Clipboard... |
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Grayson Tire Company |
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Cash Budget |
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For the Year Ended December 31, 2017 |
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Save Accounting Table... |
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First |
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Quarter |
Beginning cash balance |
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Cash receipts |
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Cash available |
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Cash payments: |
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Capital expenditures |
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Purchases of direct materials |
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Direct labor |
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Manufacturing overhead |
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Selling and administrative expenses |
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Income taxes |
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Interest expense |
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Total cash payments |
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Ending cash balance before financing |
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Minimum cash balance desired |
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Projected cash excess (deciency) |
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Financing: |
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Borrowing |
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Principal repayments |
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Total effects of financing |
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Ending cash balance |
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Save Accounting Table... |
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Second |
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Quarter |
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Save Accounting Table... |
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Third |
Quarter |
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Save Accounting Table... |
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Fourth |
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Quarter |
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Save Accounting Table... |
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Total |
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Requirement 2.
Prepare Grayson's annual financial budget for 2017, including budgeted income statement, budgeted balance sheet, and budgeted statement of cash flows.
Begin with the budgeted income statement. (Complete all input boxes. Enter a "0" for any zero balances.)
Review the sales budget you prepared above.
Review the cost of goods sold budget you prepared above.
Review the selling and administrative expense budget you prepared above.
Review the cash budget you prepared above.
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Save Accounting Table... |
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Copy to Clipboard... |
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Grayson Tire Company |
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Budgeted Income Statement |
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For the Year Ended December 31, 2017 |
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Sales Revenue |
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Cost of Goods Sold |
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Gross Profit |
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Selling and Administrative Expenses |
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Operating Income |
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Interest Expense |
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Income before Income Taxes |
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Income Tax Expense |
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Net Income |
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Prepare the budgeted balance sheet. (Round to the nearest whole dollar.)
Review the production budget you prepared above.
Review the direct materials budget you prepared above.
Review the selling and administrative expense budget you prepared above.
Review the cash receipts budget you prepared above.
Review the cash payments budget you prepared above.
Review the cash budget you prepared above.
Review the income statement you prepared above.
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Save Accounting Table... |
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Copy to Clipboard... |
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Grayson Tire Company |
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Budgeted Balance Sheet |
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December 31, 2017 |
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Assets |
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Current Assets: |
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Cash |
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Accounts Receivable |
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Raw Materials Inventory |
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Finished Goods Inventory |
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Total Current Assets |
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Property, Plant, and Equipment: |
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Equipment |
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Less: Accumulated Depreciation |
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Total Assets |
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Liabilities |
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Current Liabilities: |
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Accounts Payable |
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Stockholders' Equity |
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Common Stock, no par |
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Retained Earnings |
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Total Stockholders' Equity |
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Total Liabilities and Stockholders' Equity |
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Prepare the budgeted statement of cash flows. (Enter a use of cash with a minus sign or parentheses. Complete all input boxes. Enter a "0" for any zero balances.)
Review the cash budget you prepared above.
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Save Accounting Table... |
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Grayson Tire Company |
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Budgeted Statement of Cash Flows |
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For the Year Ended December 31, 2017 |
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Operating Activities: |
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Cash receipts from customers |
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Cash payments for operating expenses |
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Cash payments for interest expense |
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Cash payments for income taxes |
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Net cash provided by (used for) operating activities |
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Investing Activities: |
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Cash payments for equipment purchases |
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Net cash used for investing activities |
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Financing Activities: |
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Proceeds from issuance of notes payable |
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Payment of notes payable |
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Net cash provided by financing activities |
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Net increase in cash |
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Cash balance, January 1, 2017 |
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Cash balance, December 31, 2017 |
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