Chapter 22, Problem E22.30E

Preparing the financial budget—budgeted balance sheet

Learning Objective 4 FG inventory $3,150

Barker, Inc. has the following balance sheet at December 31, 2018:

BARKER, INC.Balance SheetDecember 31, 2018
Assets
Current Assets
Cash	$2,400
Accounts Receivable	1,400
Raw Materials Inventory	500
Finished Goods Inventory	1,350
Total Current Assets		$5,650
Property, Plant, and Equipment:
Equipment	16,000
Less: Accumulated Depreciation	(1,500)	14,500
Total Assets		$20,150
Liabilities
Current Liabilities:
Accounts Payable		$1,000
Stockholders’ Equity
Common Stock, no par	$6,500
Retained Earnings	12,650
Total Stockholders’ Equity		19,150
Total Liabilities and Stockholders’ Equity		$20,150

Barker projects the following transactions for 2019:
Sales on account, $20,000.
Cash receipts from customers from sales on account, $17,600
Purchase of raw materials on account, $7,000
Payments on account, $3,500
Total cost of completed products, $16,600, which includes the following:
Raw materials used, $7,100
Direct labor costs incurred and paid, $3,900
Manufacturing overhead costs incurred and paid, $4,800
Depreciation on manufacturing equipment, $800
Cost of goods sold, $14,800
Selling and administrative costs incurred and paid, $500
Purchase of equipment, paid in 2019, $2,000
Prepare a budgeted balance sheet for Barker. Inc. for December 31, 2019.
(Hint: It may be helpful to trace the effects of each transaction on the accounting equation to determine the ending balance of each account.)