Professional Documents
Culture Documents
Factory Overhead
Indirect Manufacturing Labor
+ - - +
$ 198,000
$ 552,840
$ 58,000
$ 862,136
$ 58,000
Browning Manufacturing Company
Statement of Cost of Goods Sold (Schedule 1)
For the Year ended December 31, 1998
Sales $ 2,562,000
Less: Sales returns and allowances $ 19,200
Sales discounts allowed $ 49,200 $ 68,400
Net Sales $ 2,493,600
Less: Cost of goods sold (Schedule 1) $ 1,806,624
Gross Margin $ 686,976
Less: Selling and administrative expense $ 522,000
Operating Income $ 164,976
Less: Interest Expense $ 38,400
Income before federal and state income tax $ 126,576
Less: Estimated income tax expense $ 58,000
Net Income $ 68,576
Assets
Current assets:
Cash and marketable securities $ 495,840
Account receivable (net of allowance for doubtful accounts) $ 201,360
Inventories:
Materials $ 124,520
Less: Cost of goods sold (schedule 1) $ 210,448
Finished Goods $ 352,368
Supplies $ 22,080 $ 709,416
Prepaid taxes and insurance $ 91,920
Total current assets $ 1,498,536
Other assets:
Manufacturing plant at cost $ 2,822,400
Less: Accumulated depreciation $ 1,047,600 $ 1,774,800
Total Assets $ 3,273,336
Shareholders' equity:
Capital stock $ 1,512,000
Retained earnings $ 862,136 $ 2,374,136
Total Liabilities and Shareholders' Equity $ 3,273,336
2. Exhibit 1 - Projected Balance Sheet, December 31, 1997 vs December 31, 1998
COST OF SALES AND INVENTORIES GROUP1: JENICE JOY SUMAWAY and MIKE AGENCIA
BM 220 --- PROF. TRINIDAD
Days receiveable in 1998 improved from 49 days to 29 days
3. The budget indicate that Browning Manufacturing Company fail to achieve its goal of at least
$350,000 repayment for notes payable and have a year-end cash balance of $150,000.
The budget shows that after repaying $350,000, year-end cash balance will fall at $145,840, short of $4,160.
To be able to achieve this goal, Browning Manufacturing company must work more in their collection,
convert at least 3%-5% ($6,000 - $10,068)of accounts receivables to cash. Doing this, year-end cash balance
will be at $151,480 - $155,548.
COST OF SALES AND INVENTORIES GROUP1: JENICE JOY SUMAWAY and MIKE AGENCIA
BM 220 --- PROF. TRINIDAD