Rafael Formoso, Cathrene Lugtu, Micah Mendoza Acc 20 F

Case 6-1 30-Jul-10

T-ACCOUNTS:
Finished Goods Inventory Depreciation, Plant Interest Expense
257,040 1,806,624 140,400 38,400
1,901,952

2,158,992 1,806,624 Social Security Taxes Income Tax Expense

352,368 49,200 58,000

Work in Process Inventory Taxes and Insurance, Cash

172,200 1,901,952 Factory 118,440 144,000
811,000 52,800 264,000 78,000
1,129,200 2,604,000 492,000
198,000
2,112,400 1,901,952 Supplies Expense 49,200
210,448 61,200 135,600
522,000
38,400
Materials Sales 788,400
110,520 811,000 2,562,000 9,000
825,000 36,000
52,200
935,520 811,000 Sales Returns
124,520 And Allowances 2,986,440 2,542,800
19,200 443,640

Direct Manufacturing
Labor Sales Discounts Accounts Receivables
492,000 49,200 311,760 19,200
2,562,000 49,200
2,604,000
Indirect Manufacturing Cost of Goods Sold
Labor 1,806,624 2,873,760 2,672,400
198,000 201,360

Selling & Administrative

 Power, Heat, & Light Expense
135,600 522,000

Supplies Notes Payable

17,280 61,200 288,840
66,000 264,000

83,280 61,200 552,840

22,080

Income Taxes Payable

Prepaid Taxes & Insurance 9,000 9,000
66,720 52,800 5,800
78,000
9,000 14,800
144,720 52,800 5,800
91,920

Capital Stock
Plant & Equipment 1,512,000
2,678,400
144,000
Retained Earnings
2,822,400 36,000 829,560
68,576

Accumulated Depreciation, 36,000 898,136

Plant & Equipment 862,136
907,200
140,400

1,047,600

Accounts Payable
788,400 185,760
825,000
66,000
 788,400 1,076,760
288,360

EXHIBIT 1: BALANCE SHEET

2005 2006 INC/DEC
ASSETS:
Cash and marketable securities 118440 443640 INCREASE
Accounts receivable 311760 201360 DECREASE
Materials 110520 124520 INCREASE
Work in process 172200 210448 INCREASE
Finished goods 257040 352368 INCREASE
Supplies 17280 22080 INCREASE
Perpaid taxes and insurance 66720 91920 INCREASE
Manufacturing plant, at cost 2678400 2822400 INCREASE
Accumulated depreciation 907200 1047600 INCREASE
TOTAL 2825160 3221136 INCREASE

LIABILITIES:
Accounts payable 185760 288360 INCREASE
Notes payable 288840 552840 INCREASE
Income taxes payable 9000 5800 DECREASE
TOTAL 483600 847000 INCREASE

SHAREHOLDERS' EQUITY:
Capital stock 1512000 1512000 DECREASE
Retained earnings 829560 862136 INCREASE
TOTAL 2341560 2374136 INCREASE
EXHIBIT 2- STATEMENT OF COST OF GOODS SOLD

2005 2006 INC/DEC

Materials used 663120 811000 INCREASE
Direct manufacturing labor 419040 492000 INCREASE
Indirect manufacturing labor 170640 198000 INCREASE
Power, heat, and light 116760 135600 INCREASE
Depreciation of plant 126600 140400 INCREASE
Social Security Taxes 42120 49200 INCREASE
Taxes and insurance, factory 46320 52800 INCREASE
Supplies 56880 61200 INCREASE
Cost of goods sold 1568280 1806624 INCREASE

EXHIBIT 3 -INCOME STATEMENT

2005 2006 INC/DEC

Sales 2295600 2562000 INCREASE
Net sales 2234040 2493600 INCREASE
Gross margin 665760 686976 INCREASE
Operating income 228600 164976 DECREASE
Income befor federal and state income tax 194520 126576 DECREASE
Net income 105000 68576 DECREASE
 Browning Manufacturing Company
Projected 2006 Statement of Cost of Goods Sold

Finished goods inventory, 1/1/06 $ 257,040

Work in process inventory, 1/1/06 $ 172,200
Materials used 811,000
Plus: Factory Expenses
Direct manufacturing labor 492,000
Factory overhead
Indirect manufacturing labor $ 198,000
Power, heat, and light 135,600
Depreciation of plant 140,400
Social Security Taxes 49,200
Taxes and insurance, factory 52,800
Supplies 61,200
637,200
2,112,400
Less: Work in process inventory, 12/31/06 210,448
Cost of goods manufactured 1,901,952
2,158,992
Less: Finished Goods Inventory, 12/31/06 352,368
Cost of goods sold $ 1,806,624
 Browning Manufacturing Company
Projected 2006 Income Statement

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 1,806,624
Gross margin 686,976
Less: Selling and administrative expense 522,000
Operating income 164,976
Less: Interest expense 38,400
Income befor federal and state income tax 126,576
Less: Estimated income tax expense 58,000
Net income $ 68,576

Browning Manufacturing Company

Projected 2006 Statement of Retained Earnings

Retained earnings, 12/31/05 $ 829,560

Add net income 68,576
898,136
Less: Dividends 36,000
Retained earnings, 12/31/06 $ 862,136
 Browning Manufacturing Company
Projected Balance Sheet
December 31, 2006

Assets
Current Assets
Cash and marketable securities $ 443,640
Accounts receivable 201,360
Inventories:
Materials $ 124,520
Work in process 210,448
Finished goods 352,368
Supplies 22,080 709,416
Perpaid taxes and insurance 91,920
Total current assets 1,446,336

Manufacturing plant, at cost 2,822,400

Less: Accumulated depreciation 1,047,600 1,774,800
Total Assets $ 3,221,136

Liabilities and Shareholders' Equity

Current liabilities
Accounts payable $ 288,360
Notes payable 552,840
Income taxes payable 5,800
Total current liabilities $ 847,000

Shareholders' Equity
Capital stock 1,512,000
Retained earnings 862,136
2,374,136
Total liabilities and shareholders' equity $ 3,221,136
Finished goods inventory 257040
Work in process inventory 172,200
Materials used 811,000
Direct manufacturing labor 492,000
Indirect manufacturing labor 198000
Power, heat, and light 135600
Depreciation of plant 140400
Social Security Taxes 49200
Taxes and insurance, factory 52800
Supplies 61200
Cost of goods manufactured ###
Cost of goods sold 1806624
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
EXHIBIT 2 -INCOME STATEMENT
### 2,542,800
### 2005
Sales 2295600
Net sales 2234040
Accounts Receivables Gross margin 665760
311760 19200 Operating income 228600
2562000 49200 Income befor federal and state income t 194520
2604000 Net income 105000

2873760 2672400
201360
 2006 INC/DEC
2562000 INCREASE
2493600 INCREASE
686976 INCREASE
164976 DECREASE
126576 DECREASE
68576 DECREASE