Rafael Formoso, Cathrene Lugtu, Micah Mendoza

Case 6-1
T-ACCOUNTS:
Finished Goods Inventory
257,040 1,806,624
1,901,952

Acc 20 F
30-Jul-10

Depreciation, Plant
140,400

Interest Expense
38,400

1,806,624

Social Security Taxes
49,200

Income Tax Expense
58,000

Work in Process Inventory
172,200 1,901,952
811,000
1,129,200

Taxes and Insurance,
Factory
52,800

2,158,992
352,368

2,112,400
210,448

1,901,952

Materials
110,520
811,000
825,000
935,520
124,520

811,000

Direct Manufacturing
Labor
492,000

Indirect Manufacturing
Labor
198,000

Supplies Expense
61,200

Sales
2,562,000

Sales Returns
And Allowances
19,200

Sales Discounts
49,200

Cost of Goods Sold
1,806,624

Power, Heat, & Light
135,600

Selling & Administrative
Expense
522,000

Supplies

Notes Payable

Cash
118,440
144,000
264,000
78,000
2,604,000
492,000
198,000
49,200
135,600
522,000
38,400
788,400
9,000
36,000
52,200
2,986,440 2,542,800
443,640

Accounts Receivables
311,760
19,200
2,562,000
49,200
2,604,000
2,873,760 2,672,400
201,360

000 144.822.800 78.576 2.512.000 83.400 Accumulated Depreciation.800 5.047.000 Retained Earnings 36.400 185.17.360 EXHIBIT 1: BALANCE SHEET 36.200 288.000 9.000 788.080 61.136 .000 5.840 264.400 1. Plant & Equipment 907.600 Accounts Payable 788.840 Prepaid Taxes & Insurance 66.920 52.000 898.800 1.200 552.760 825.800 Plant & Equipment 2.678.560 68.720 52.076.200 140.000 Capital Stock 1.280 22.720 91.000 66.000 Income Taxes Payable 9.760 288.800 9.400 14.400 144.000 829.136 862.280 66.000 61.

2005 ASSETS: Cash and marketable securities Accounts receivable Materials Work in process Finished goods Supplies Perpaid taxes and insurance Manufacturing plant. at cost Accumulated depreciation TOTAL LIABILITIES: Accounts payable Notes payable Income taxes payable TOTAL SHAREHOLDERS' EQUITY: Capital stock Retained earnings TOTAL 2006 INC/DEC 118440 311760 110520 172200 257040 17280 66720 2678400 907200 2825160 443640 INCREASE 201360 DECREASE 124520 INCREASE 210448 INCREASE 352368 INCREASE 22080 INCREASE 91920 INCREASE 2822400 INCREASE 1047600 INCREASE 3221136 INCREASE 185760 288840 9000 483600 288360 INCREASE 552840 INCREASE 5800 DECREASE 847000 INCREASE 1512000 829560 2341560 1512000 DECREASE 862136 INCREASE 2374136 INCREASE EXHIBIT 2.STATEMENT OF COST OF GOODS SOLD Materials used 2005 663120 2006 INC/DEC 811000 INCREASE .

factory Supplies Cost of goods sold 419040 492000 INCREASE 170640 198000 INCREASE 116760 135600 INCREASE 126600 140400 INCREASE 42120 49200 INCREASE 46320 52800 INCREASE 56880 61200 INCREASE 1568280 1806624 INCREASE EXHIBIT 3 -INCOME STATEMENT Sales Net sales Gross margin Operating income Income befor federal and state income tax Net income 2005 2006 INC/DEC 2295600 2562000 INCREASE 2234040 2493600 INCREASE 665760 686976 INCREASE 228600 164976 DECREASE 194520 126576 DECREASE 105000 68576 DECREASE .Direct manufacturing labor Indirect manufacturing labor Power. heat. and light Depreciation of plant Social Security Taxes Taxes and insurance.

368 1.448 1.200 2.112.901.806.000 198. 12/31/06 Cost of goods manufactured Less: Finished Goods Inventory. 12/31/06 Cost of goods sold 257.992 352. 1/1/06 Materials used Plus: Factory Expenses Direct manufacturing labor Factory overhead Indirect manufacturing labor Power.Browning Manufacturing Company Projected 2006 Statement of Cost of Goods Sold Finished goods inventory.000 492.952 2. factory Supplies Less: Work in process inventory.158.200 811.040 172.800 61.600 140.400 49.200 52.624 .400 210. heat. 1/1/06 Work in process inventory. and light Depreciation of plant Social Security Taxes Taxes and insurance.000 135.200 637.

000 164.976 38.806.560 68.576 58.200 49.000 862. 12/31/06 Browning Manufacturing Company 68.576 898.Browning Manufacturing Company Projected 2006 Income Statement Sales 2.136 36. 12/31/05 Add net income 829.000 Less: Sales returns and allowances Sales discounts allowed Net sales Less: Cost of goods sold Gross margin Less: Selling and administrative expense Operating income Less: Interest expense Income befor federal and state income tax Less: Estimated income tax expense Net income 19.562.624 686.400 2.600 1.000 68.576 .400 126.493.136 Less: Dividends Retained earnings.200 Browning Manufacturing Company Projected 2006 Statement of Retained Earnings Retained earnings.976 522.

640 201.446. at cost Less: Accumulated depreciation Total Assets Liabilities and Shareholders' Equity Current liabilities Accounts payable Notes payable Income taxes payable Total current liabilities Shareholders' Equity Capital stock Retained earnings Total liabilities and shareholders' equity 443.448 352.416 91.000 1.368 22.374.047.512.136 2.221.800 3.360 552.774.520 210.221.336 1.822.920 1.600 709.400 1.2006 Assets Current Assets Cash and marketable securities Accounts receivable Inventories: Materials Work in process Finished goods Supplies Perpaid taxes and insurance Total current assets Manufacturing plant.000 862.840 5.080 2.136 288.136 .800 847.136 3.Projected Balance Sheet December31.360 124.

.

heat.Finished goods inventory Work in process inventory Materials used Direct manufacturing labor Indirect manufacturing labor Power.952 1806624 .000 492.901.000 198000 135600 140400 49200 52800 61200 1. factory Supplies Cost of goods manufactured Cost of goods sold 257040 172. and light Depreciation of plant Social Security Taxes Taxes and insurance.200 811.

440 144.600 522.Cash 118.000 52.000 38.200 135.200 EXHIBIT 2 -INCOME STATEMENT ### ### ### Accounts Receivables 311760 19200 2562000 49200 2604000 2873760 2672400 201360 Sales Net sales Gross margin Operating income Income befor federal and state income tax Net income .000 36.000 78.000 ### 492.000 49.400 9.000 264.000 198.400 788.

OME STATEMENT al and state income tax 2005 2295600 2234040 665760 228600 194520 105000 2006 INC/DEC 2562000 INCREASE 2493600 INCREASE 686976 INCREASE 164976 DECREASE 126576 DECREASE 68576 DECREASE .

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