There are two (2) questions.
Question 1: Show all workings. Could be done in word or excel format.
Question 2: Answer should be in word document format.
QUESTION 1
Bill Thomas Bates & Hills controller has received all the budgets prepared by the various operating units and is ready to compile the pro-forma financial statements for the first quarter. The companys balance sheet as of December 31 is as follows:
Cash.. $ 36000
Accounts Receivable (net) 35100
Finished Goods Inventory 29400
Raw Materials Inventory 4536
Property Plant & Equipment 180000
Accumulated Depreciation (45000)
Total Assets $240036
Accounts Payable .. $10800
Income Tax Payable .. 45156
Common Stock .. 60000
Retained Earnings . 124080
Total Liabilities & Owners Equity $240036
Additional Information:
The company expects a 18% income tax rate and all quarterly taxes are paid in the first month of the following quarter.
The company expects a 30% income tax rate and all quarterly taxes are paid in the first month of the following quarter.
Required
a. Prepare Bates & Hills pro-forma income statement for the first quarter.
b. Prepare Bates & Hills pro-forma balance sheet as of March 31.
….
QUESTION 2
Complete essay in Word document in APA format.
Essay Question 1
Complete the essay questions in one Word document and submit to the Dropbox:
Management by exception focuses only on those variances management considers important. List three factors that managers use in deciding whether or not to investigate a variance and give an example of each.
Essay Question 2
Managers use budgeting to control and evaluate their operations. Two types of budgets that werediscussed: the static budget and the flexible budget. How do the two budgets differ and explain how the flexible budget is used in evaluating performance.