Answer:
Wolfpack Company
Balanced Budget Sheet as of July 1st:
Wolfpack Company
Balance Sheet as of June 30
Assets
Cash $ 92,500
Accounts receivable 63,000
Inventory 22,000
Buildings and equipment, net of depreciation 147,000
Total assets $ 324,500
Liabilities and Stockholders’ Equity
Accounts payable $ 36,800
Common stock 100,000
Retained earnings 187,700
Total liabilities and stockholders’ equity $ 324,500
Explanation:
a) Data
Wolfpack Company
Balance Sheet as of June 30
Assets
Cash $ 75,000
Accounts receivable 50,000
Inventory 30,000
Buildings and equipment, net of depreciation 150,000
Total assets $ 305,000
Liabilities and Stockholders’ Equity
Accounts payable $ 35,300
Common stock 100,000
Retained earnings 169,700
Total liabilities and stockholders’ equity $ 305,000
b) Accounts Receivable
Beginning balance = 50,000
Sales 90,000
Cash receipts:
30% (27,000)
June balance (50,000) Total receipts = $77,000
Ending balance 63,000
30% receipts = $27,000 ($77,000 - 50,000)
Sales = $27,000/30% = $90,000
Ending balance = $63,000 ($90,000 x 70%)
c) Accounts Payable
Beginning balance 35,300
Purchases 46,000
Payments:
20% (9,200)
June balance (35,300) Disbursement = $44,500
Ending balance (80%) 36,800
20% cash payment = $9,200 ($44,500 - 35,300)
Purchases = $46,000 (9,200/20%)
Ending balance = $36,800 ($46,000 x 80%)
d) Cost of goods sold:
Beginning Inventory 30,000
Purchases 46,000
Available for sale 76,000
Ending inventory (22,000)
Cost of goods sold 54,000
Depreciation $3,000
e) Income Statement for July
Sales 90,000
Cost of goods sold 54,000
Gross profit 36,000
Depreciation (3,000)
Selling & Admin (15,000)
Net Income $18,000
f) Retained Earnings:
Beginning balance $169,700
Net income 18,000
Ending balance $187,700
g( Cash balance:
Beginning balance $75,000
Cash collections 77,000
Cash disbursements:
Purchases (44,500)
Selling & admin (15,000)
Ending balance $92,500
