Requirement 2.

Sosa Company
Budgeted Balance Sheet
March 31, 2019
Assets
Current Assets:
Cash (W.N 1) 129,365
Accounts Receivable (W.N 2) 65,800
Raw Materials Inventory 7,000
Finished goods Inventory (W.N 3) 3,650
Total Current Assets 205,815
Property, Plant and Equipment:
Equipment (W.N 4) 144,000
Less: Accumulated Depreciation (W.N 6) 26,200 117,800
Total Assets 323,615
Liabilities
Current Liabilities:
Accounts Payable (W.N 5) 9,300
Stockholders’ equity
Common Stock 100,000
Retained Earnings (W.N 7) 214,315
Total Stockholders’ equity 314,315
Total Liabilities and Stockholders’ equity 323,615

Working Notes (W.N 1):

1.

Cash Account
Particular Debit Credit Balance
Balance December 31,2018 20,000 Dr
Budgeted Cash receipt from customer 264,000 284,000 Dr
Accounts Payable of December 31,2018 10,500 273,500 Dr
Budgeted Direct Material paid (31,000*70%) 21,700 251,800 Dr
Budgeted Direct Labor cost 13,500 238,300 Dr
Budgeted variable Manufacturing Overhead 2,600 235,700 Dr
Budgeted Insurance and property taxes 1,050 234,650 Dr
Budgeted Salaries expenses 8,000 226,650 Dr
Budgeted Rent Expenses 5,000 221,650 Dr
Budgeted Insurance expenses 2,000 219,650 Dr
Budgeted Supplies expenses 9,285 210,365 Dr
Budgeted Income tax paid 47,000 163,365 Dr
Budgeted Capital expenditure (additional equipment) 34,000 129,365 Dr

2.

Account Receivable Account

Particular Debit Credit Balance
Balance December 31,2018 20,300 Dr
Budgeted Sales on account 309,500 329,800 Dr
Budgeted Cash receipt from customer 264,000 65,800 Dr

3.

Finished goods Inventory

Particular Debit Credit Balance
Balance December 31,2018 26,000 Dr
Budgeted Direct Material 31,000 57,000 Dr
Budgeted Direct Labor cost 13,500 70,500 Dr
Budgeted variable Manufacturing Overhead 2,600 73,100 Dr
Budgeted Insurance and property taxes 1,050 74,150 Dr
Budgeted Manufacturing Depreciation 700 74,850 Dr
Budgeted cost of goods sold 71,200 3,650 Dr

4.

Equipment Account
Particular Debit Credit Balance
Balance December 31,2018 110,000 Dr
Budgeted Capital expenditure (additional equipment) 34,000 144,000 Dr

5.

Accounts Payable Account

Particular Debit Credit Balance
Balance December 31,2018 10,500 10,500 Cr
Budgeted Direct Materials (31,000*30%) 9,300 19,800 Cr
Cash Paid 10,500 9,300 Cr

6.

Accumulated Depreciation Account

Particular Debit Credit Balance
Balance December 31,2018 25,000 25,000 Cr
Budgeted Manufacturing Depreciation 700 25,700 Cr
Budgeted Selling and Administrative Depreciation 500 26,200 Cr

7.

Retained Earnings Account

Particular Debit Credit Balance
Balance December 31,2018 47,800 47,800 Cr
Net Income transfer 166,515 214,315 Cr