Question

Exercise 20-33A Merchandising: Budgeted balance sheet LO P3 The following Information is available for Zetrov Company: a. The cash budget for March shows an ending bank loan of $15,500 and an ending cash balance of $64,700. b. The sales budget for March indicates sales of $131,000. Accounts receivable are expected to be 60% of the current-month sales. c. The merchandise purchases budget Indicates that $90,100 In merchandise will be purchased on account In March. Purchases on account are paid 100% In the month following the purchase. Ending Inventory for March is predicted to be 710 units at a cost of $40 each. d. The budgeted Income statement for March shows net Income of $49,100. Depreciation expense of $2,100 and $27,100 In Income tax expense were used in computing net Income for March. Accrued taxes will be pald In April. e. The balance sheet for February shows equipment of $82,900 with accumulated depreciation of $31,100, common stock of $30,500, and ending retained earnings of $9,100. There are no changes budgeted In the equipment or common stock accounts. Prepare a budgeted balance sheet at the end of March. ZETROV COMPANY Budgeted Balance Sheet As of March 31

Answer 1

Budgeted Balance Sheet is as prepared below:

ZETROV COMPANY
Budgeted Balance Sheet
As of March 31
Assets	Amount ($)	Amount ($)
Cash	64,700
Accounts receivable (131,000*.6)	78,600
Merchandise Inventory (710*40)	28,400
Total current assets		171,700
Equipment	82,900
Accumulated depreciation	-33200
Equipment, net		49,700
Total assets		221,400
Liabilities
Accounts payable	90,100
Bank loan payable	15,500
Income taxes payable	27,100
Total liabilities		132,700
Equity
Common stock	30,500
Retained earnings (49,100+9,100)	58,200
Total Stockholders' Equity		88,700
Total Liabilities and Equity		221,400