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Thursday, 2 August 2012

The management of Academic Copy, a photocopying center located on University Avenue, has

The management of Academic Copy, a photocopying center located on University Avenue, has compiled the following data to use in preparing its budgeted balance sheet for next year:

  Ending Balances
  Cash   ?  
  Accounts receivable $ 6,500  
  Supplies inventory $ 2,100  
  Equipment $ 28,000  
  Accumulated depreciation $ 9,000  
  Accounts payable $ 1,900  
  Common stock $ 4,000  
  Retained earnings   ?  


The beginning balance of retained earnings was $21,000, net income is budgeted to be $8,600, and dividends are budgeted to be $3,500.

Required:
Prepare the company’s budgeted balance sheet. (Be sure to list the assets and liabilities in order of their liquidity. Amounts to be deducted should be indicated with minus sign. Omit the "$" sign in your response.)

Academic Copy
Budgeted Balance Sheet
Assets    
  Current assets:    
     Cash correct $ 4,400 correct    
     Accounts receivable correct 6,500 correct    
     Supplies inventory correct 2,100 correct    
 
 
  Total current assets   $ 13,000 correct  
  Plant and equipment:    
     Equipment correct 28,000 correct    
     Accumulated depreciation correct -9,000 correct    
  
 
  Plant and equipment, net   19,000 correct  
    
  Total assets   $ 32,000 correct  
   

Liabilities and Stockholders' Equity    
  Current liabilities:    
     Accounts payable correct   $ 1,900 correct  
  Stockholders' equity:    
     Common stock correct 4,000 correct    
     Retained earnings correct 26,100 correct    
 
 
  Total stockholders' equity   30,100 correct  
   
  Total liabilities and stockholders' equity   $ 32,000 correct