Budgeted Balance Sheet:
Definition and Explanation:
The budgeted balance sheet is developed by
beginning with the current balance sheet and adjusting it for the data
contained in other budgets.
Example | Sample of Budgeted Balance Sheet:
Following is the budgeted balance sheet of
Hampton Freeze Inc. Some of the data on the budgeted balance sheet have been
taken from the company's previous end-of-year balance sheet for 2008 which
appears below the budgeted balance sheet for 2009.
|
Hampton
Freeze Inc.
Budgeted Balance Sheet
December 31, 2009 |
|
Assets |
|
Current assets: |
| Cash |
1 |
$47,500 |
|
| Accounts
receivable |
2 |
120,000 |
|
| Raw
materials inventory |
3 |
4,500 |
|
| Finished
goods inventory |
4 |
39,000 |
|
| |
|
------------- |
|
| Total
current assets |
|
|
$211,000 |
|
Plant and equipment: |
| Land |
5 |
80,000 |
|
| Building
and equipment |
6 |
830,000 |
|
|
Accumulated depreciation |
7 |
(392,000) |
|
| |
|
-------------- |
|
| Plant and
equipment, net |
|
|
$518,000 |
| |
|
|
-------------- |
| Total
assets |
|
|
$729,000 |
| |
|
|
======= |
|
Liabilities and Stockholders' Equity |
|
Current liabilities: |
| Accounts
payable (raw materials) |
8 |
|
$27,000 |
|
Stockholders' equity: |
| Common
stock, no par |
9 |
$175,000 |
|
| Retained
earnings |
10 |
526,000 |
|
| |
|
-------------- |
|
| Total
stock holders' equity |
|
|
701,100 |
| |
|
|
-------------- |
| Total
liabilities and stockholders equity |
|
|
$729,000 |
| |
|
|
======= |
|
Hampton
Freeze, Inc.
Balance Sheet
December 31, 2008 |
|
Assets |
|
Current Assets: |
| Cash |
$42,500 |
|
| Accounts
receivable |
90,000 |
|
| Raw
materials inventory (21,000 pounds) |
4,200 |
|
| Finished
goods inventory (2,000 cases) |
26,000 |
|
| |
------------- |
|
| Total
current assets |
|
$162,700 |
|
Plant and Equipment: |
| Land |
80,000 |
|
| Building
and equipment |
700,000 |
|
|
Accumulated depreciation |
(292,000) |
|
| |
------------- |
|
| Plant and
equipment, net |
|
$488,000 |
| |
------------- |
| Total
assets |
|
$650,700 |
|
Liabilities and Stockholders' Equity |
|
Current Liabilities: |
| Accounts
payable (raw materials) |
|
$25,800 |
|
Stockholders' Equity: |
| Common
stock, no par |
$175,000 |
|
| Retained
earnings |
449,900 |
|
| |
------------- |
|
| Total
stock holders' equity |
|
624,000 |
| |
------------- |
| Total
liabilities and stockholders' equity |
|
$650,700 |
| |
|
======= |
Explanation of December 31, 2009, budgeted balance
sheet figures:
- The ending cash balance, as projected by
the cash budget on cash budget page.
- Thirty percent of fourth quarter sales,
from sales budget ($400,000 ×
30% = $120,000)
- From direct materials budget, ending raw
materials inventory will be 22,500 pounds. This material costs $0.20 per
pound. Therefore, the ending inventory in dollars will be 22,500 pounds × $0.20 = $4,500.
- From ending finished goods inventory
budget.
- From December 2008 balance sheet (no
change).
- The December 2008 balance sheet indicated
a balance of $700,000. During 2009, $130,000 of additional equipment will
be purchased (see cash budget), bringing the December 31, 2009, balance to
$830,000.
- The December 31, 2008 balance sheet
indicated a balance of $292,000. During 2009, $100,000 depreciation will
be taken ($60,000 from manufacturing overhead budget, and $40,000 selling
and administrative expense budget), bringing the December 2009, balance to
$392,000.
- One half of the fourth quarter raw
materials purchase, from direct materials budget.
- From the December 2008 balance sheet (no
change).
|
10. |
December
31, 2008, balance |
$449,900 |
| |
Add net
income, from budgeted income statement |
108,200 |
| |
|
------- |
| |
558,100 |
| |
Deduct
dividend paid from cash budget |
32,000 |
| |
|
------- |
| |
December
31, 2009, balance |
$526,100 |
| |
|
====== |
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