Question

The management of Mecca Copy, a photocopying center located on University Avenue, has compiled the following data to use in preparing its budgeted balance sheet for next year: Ending Balances Cash ? Accounts receivable $ 8,900 Supplies inventory $ 5,500 Equipment $ 38,000 Accumulated depreciation $ 15,400 Accounts payable $ 2,600 Common stock $ 5,000 Retained earnings ? The beginning balance of retained earnings was $25,000, net income is budgeted to be $21,100, and dividends are budgeted to be $3,500.

Answer 1

Mecca Copy

Budgeted Balance Sheet

Assets

Current assets:

Cash 13200

Accounts receivable 8900

Supplies inventory 5500

Total current assets 27600

Plant and equipment:

Equipment 38000

Accumulated depreciation (15400)

Plant and equipment, net 22600

Total assets 50200

Liabilities and Stockholders' Equity

Current liabilities:

Accounts payable 2600

Stockholders' equity:

Common stock 5000

Retained earnings 42600

Total stockholders' equity 47600

Total liabilities and stockholders' equity 50200

Note: Retained earnings = beginning balance of retained earnings + Net income - Dividend

= 25,000 + 21100 - 3500

= 42,600