The following information is available for the development of its Master Budget for 2019:

Estimated Sales:
Units
Price per unit
Finished goods inventory:
Beginning
Ending
Work in process inventory:
NONE
Raw Materials:

Materials required per unit of finished product

Beginning inventory
Ending inventory
Unit Cost
Direct labor

Overhead is as follows:
VARIABLE:
Indirect materials and supplies
Materials handling
Other indirect labor
FIXED:
Supervisor labor
Maintenance & repair
Plant administration
Utilities
Depreciation
Insurance
Property taxes
Other

Marketing and Administrative expenses are budgeted as follows:

VARIABLE MARKETING COSTS:
Sales commissions
Other marketing costs
FIXED MARKETING COSTS:
Sales salaries
Advertising
Other
ADMINISTRATIVE COSTS (ALL FIXED):
Administrative salaries
Data processing services
Legal and other professional fees
Depreciation - building, furniture and equipment
Taxes - other than income
Other

ADDITIONAL INFORMATION:
THE TREASURER'S OFFICE ALSO PROVIDED THE FOLLOWING INFORMATION AND ESTIMATES:
1. Collections from customers are expected to amount to
2. Equipment costing
with Accumulated Depreciation of
will be sold at its net book value.
New Equipment costing
will be purchased during the year.
3. Accounts payable will increase by
assumed to be for materials purchases only
4. Income taxes will be provided at an average rate of
of income before taxes while
will be paid during the year.
5. Dividends amounting to
wil be paid during the year and the current portion of the
long-term debt shall also be settled at the end of the year.
Interest rate is
 6,400
800

900 units @ ₱ 500

1,000

Material
R S
3 5 in units
2,200 4,000
1,300 4,600
₱ 10 ₱ 30
₱ 146 per unit produced

₱ 6 per unit produced

₱ 9 per unit
₱ 5 per unit

₱ 175,000
85,000
173,000
87,000
280,000
43,000
117,000
41,000

₱ 41 per unit sold

₱ 16 per unit sold

₱ 100,000
193,000
78,000

₱ 254,000
103,000
180,000
94,000
160,000
26,000

₱ 5,185,000
300,000
275,000

320,000

15,000

35%
252,000

140,000

8% per annum.
#NAME?
 Gilbert Company
Statement of Financial Position
December 31, 2018
Assets Equities
Current assets Current Liabilities
Cash ₱ 150,000 Accounts Payable ₱ 140,000
Accounts receivable 220,000 Taxes payable 156,000
Inventories 592,000 Current portion of long - term deb 83,000
Other current assets 23,000 Total current liabilities ₱ 379,000
Total current assets ₱ 985,000 Long - term liabilities 576,000
Total liabilities ₱ 955,000
Long - term assets
Property, plant and equipment ₱ 2,475,000 Equity
Less: Accumulated depreciati 850,000 Share capital ₱ 350,000
Net ₱ 1,625,000 Retained earnings 1,305,000
Total equity ₱ 1,655,000

Total assets ₱ 2,610,000 Total liabilities and equity ₱ 2,610,000

SCHEDULE 1
Sales Budget
For 2019
Price
Total Sales
Units per
Revenue
Estimat Unit
ed 6,400 800 ###
Sales:
₱ 256,000 A/R END
SCHEDULE 2
Production Budget
For 2019
Units to be sold 6,400
Add: Desired ending inventory1,000
Total 7,400
Less: Beginning inventory 900
Units to be produced 6,500
SCHEDULE 3
Raw Materials Purchases
For 2019
Materials
R S
Units required for production
R 19,500
S 32,500
Add: Desired ending inventory 1,300 4,600
Total units required 20,800 37,100
Less: Beginning inventory 2,200 4,000
Units to be purchased 18,600 33,100
Unit price ₱ 10 ₱ 30
Total Purchases ₱ 186,000 ₱ 993,000
Total Purchases ₱ 1,179,000
SCHEDULE 4
Direct Labor Budget
For 2019
Number of units to be produced 6,500
Multiply by: Direct labor cost per unit ₱ 146
Total budgeted direct labor costs ₱ 949,000
SCHEDULE 5
Budgeted Manufacturing Overhead
For 2019
Variable overhead: units needed to produce 6,500
Indirect materials and supplies ₱ 38,025
Materials handling 58,955
Other indirect labor 32,955
Total ₱ 129,935

Fixed manufacturing overhead

Supervisor labor ₱ 175,000
Maintenance & repairs 85,000
Plant administration 173,000
Utilities 87,000
Depreciation 280,000
Insurance 43,000
Property taxes 117,000
Others 41,000
Total ₱ 1,001,000
Total manufacturing overhead ₱ 1,130,935
SCHEDULE 6
Budgeted Statement of Cost of Sales
For 2019
Beginning work in process inventory -

Manufacturing Costs
Direct materials
Beginning inventory ₱ 142,000
Purchases 1,179,000
Total ₱ 1,321,000
Less: Ending inventory 151,000
Total Direct material cost ₱ 1,170,000
Direct labor 949,000
Manufacturing overhead 1,130,935
Total Manufacturing costs ₱ 3,249,935
Less: Ending work in process inventory -
Cost of Goods Manufactured ₱ 3,249,935
Add: Beginning finished goods 450,000
Total available for sale ₱ 3,699,935
Less: Ending finished goods 500,000
Cost of sales ₱ 3,199,935
SCHEDULE 7
Budgeted Marketing and Administrative Costs
For 2019
Variable Marketing Costs
Sales commission (@P40.625) ₱ 260,000
Others (@P16.25) 104,000
Total ₱ 364,000

Fixed Marketing Costs

Sales salaries ₱ 100,000
Advertising 193,000
Others 78,000
Total ₱ 371,000
Total Marketing costs ₱ 735,000

Administrative Costs (all fixed)

Administrative salaries ₱ 254,000
Data processing services 103,000
Legal and other professional fees 180,000
Depreciation- building, furniture and e 94,000
Taxes - other than income 107,280
Others 26,000
Total ₱ 764,280
Total marketing and administrative costs ₱ 1,499,280
SCHEDULE 8
Gilbert Manufacturing Company
Cash Budget
For the Budget Year Ending December 31, 2019
Cash balance, January 1, 2018 ₱ 150,000
Add: Estimated receipts
Collections from customers ₱ 5,084,000
Sale of assets 25,000
Total ₱ 5,109,000
Total cash available ₱ 5,259,000
Less: Estimated disbursements
Payments for material purchases ₱ 1,164,000
Direct labor 949,000
Manufacturing overhead 850,935
Marketing & Administrative expenses 1,458,000
Payments for income tax 252,000
Dividends 140,000
Reduction in long-term debt 83,000
Acquisition of new assets 320,000
Total disbursements ₱ 5,216,935
Cash balance, December 31 ₱ 42,065
SCHEDULE 9
Gilbert Manufacturing Company
Budgeted Income Statement
For the Budget Year Ending December 31, 2019
Sales (Schedule 1) ₱ 5,120,000
Less: Cost of sales (Schedule 6) 3,199,935
Gross profit ₱ 1,920,065
Less: Marketing and administrative costs (Sched 1,499,280
Net operating profit ₱ 420,785
Less: Interest expense 52,720
Net income before taxes ₱ 368,065
Less: Provision for income taxes (35%) 128,823
Net income after taxes ₱ 239,242
SCHEDULE 10
Gilbert Manufacturing Company
Budgeted Statement of Financial Position
December 31, 2019
Assets Equities
Current assets Current Liabilities
Cash (Schedule 8) ₱ 42,065 Accounts Payable ₱ 155,000
Accounts receivable 256,000 Taxes payable 32,823
Inventories 651,000 Current portion of long - term debt
Other current assets 23,000 Total current liabilities ₱ 187,823
Total current assets ₱ 972,065 Long - term liabilities 576,000
Total liabilities ₱ 763,823
Long - term assets
Property, plant and equipmen ₱ 2,495,000 Equity
Less: Accumulated depreciat 949,000 Share capital ₱ 350,000
Net ₱ 1,546,000 Retained earnings 1,404,242
Total Equity ₱ 1,754,242

Total assets ₱ 2,518,065 Total liabilities and equity ₱ 2,518,065

NOTES TO FINANCIAL STATEMENT:

Accounts Receivable, beginning ₱ 220,000 Accounts Payable, beginning ₱ 140,000

Sales 5,120,000 R Raw Materials Purchases 186,000
Total ₱ 5,340,000 S Raw Materials Purchases 993,000
Collections from customers 5,084,000 Total ₱ 1,319,000
Accounts Receivable, ending ₱ 256,000 Payments for Material Purchases 1,164,000
Accounts Payable, ending ₱ 155,000
Property, plant and equipment, beginn ₱ 2,475,000
New equipment acquired 320,000 Taxes Payable, beginning ₱ 156,000
Total ₱ 2,795,000 Property taxes - Fixed MOH 117,000
Equipment sold 300,000 Taxes - other than income** 107,280
Property, plant and equipment, end ₱ 2,495,000 Provision for income tax 128,823
Total ₱ 509,103
Accumulated depreciation, beginning ₱ 850,000 Payments for Income Tax 252,000
Depreciation - Fixed MOH 280,000 Property taxes - Fixed MOH 117,000
Depreciation - Administrative cost 94,000 Taxes - other than income 107,280
Total ₱ 1,224,000 Taxes Payable, ending ₱ 32,823
Depreciation - sold equipment 275,000 **Rounding off difference
Accumulated depreciation, ending ₱ 949,000
Retained Earnings, beginning ₱ 1,305,000
Net income 239,242
Total ₱ 1,544,242
Dividends paid 140,000
Retained Earnings, ending ₱ 1,404,242
 INVENTORY BEGINNING INVENTORY BEGINNING
Quantity Cost per Amount Quantity Cost per Amount
Description Description
unit unit
Finished Goods 900 ₱ 500 ₱ 450,000 Finished Goods 1,000 ₱ 500 ₱ 500,000
WIP 0 WIP
Raw Materials: Raw Materials:
R 2,200 10 22,000 R 1,300 10 13,000
S 4,000 30 120,000 S 4,600 30 138,000
TOTAL ₱ 592,000 TOTAL ₱ 651,000