C. The Afghanistan Bank has asked AUAF Printing Inc. for a budgeted balance sheet for the year ended December 31, 2021. The following information is available:The cash budget shows an expected cash balance of $75,000 at December 31, 2021.The 2021 sales budget shows total annual sales of $800,000. All sales are made on account and accounts receivable at December 31, 2021 are expected to be 10% of annual sales.The merchandise purchases budget shows budgeted cost of goods sold for 2021 of $600,000 and ending merchandise inventory of $95,000. 20% of the ending inventory is expected to have not yet been paid at December 31, 2021.The December 31, 2020 balance sheet includes the following balances: Equipment $294,000, Accumulated Depreciation $122,000, Common Stock $270,000, and Retained Earnings $48,000.The budgeted income statement for 2021 includes the following: depreciation on equipment $15,000, income taxes $21,000, and net income $49,000. The income taxes will not be paid until 2021.In 2021, management does not expect to purchase additional equipment or to declare any dividends. It does expect to pay all operating expenses, other than depreciation, in cash.InstructionsPrepare an unclassified budgeted balance sheet at December 31, 2016.

In this problem we will first prepare Cash A/c from the available information. Then…

Answered: C. The Afghanistan Bank has asked AUAF…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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C. The Afghanistan Bank has asked AUAF Printing Inc. for a budgeted balance sheet for the year ended December 31, 2021. The following information is available:

The cash budget shows an expected cash balance of $75,000 at December 31, 2021.
The 2021 sales budget shows total annual sales of $800,000. All sales are made on account and accounts receivable at December 31, 2021 are expected to be 10% of annual sales.
The merchandise purchases budget shows budgeted cost of goods sold for 2021 of $600,000 and ending merchandise inventory of $95,000. 20% of the ending inventory is expected to have not yet been paid at December 31, 2021.
The December 31, 2020 balance sheet includes the following balances: Equipment $294,000, Accumulated Depreciation $122,000, Common Stock $270,000, and Retained Earnings $48,000.
The budgeted income statement for 2021 includes the following: depreciation on equipment $15,000, income taxes $21,000, and net income $49,000. The income taxes will not be paid until 2021.
In 2021, management does not expect to purchase additional equipment or to declare any dividends. It does expect to pay all operating expenses, other than depreciation, in cash.

Instructions

Prepare an unclassified budgeted balance sheet at December 31, 2016.

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