Supplemental Problem 15-3 Appropriation of Retained Earnings Dayton Company has decided to build a new warehouse at a cost of $2 million. It will appropriate $1 million in each of the next two years, then build the warehouse at the beginning of the third year. Required: Assuming Dayton makes journal entries to account for appropriations, record the following: 1. The appropriation of Retained Earnings in year 1. 2. The appropriation of Retained Earnings in year 2. 3. The completion of the warehouse in year 3 at an actual cost of $2,300,000. Dayton paid cash. 4. The release of the appropriation in year 3.
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Supplemental Problem 15-3 Appropriation of
Dayton Company has decided to build a new warehouse at a cost of $2 million. It will appropriate $1 million in each of the next two years, then build the warehouse at the beginning of the third year.
Required: Assuming Dayton makes
1. The appropriation of Retained Earnings in year 1.
2. The appropriation of Retained Earnings in year 2.
3. The completion of the warehouse in year 3 at an actual cost of $2,300,000. Dayton paid cash.
4. The release of the appropriation in year 3.
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