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Ceradyne operates a computer training center. The following data relate to the preparation of a master budget for January 2021 1. At the end of 2020, the company's general ledger indicated the following balances: Cash Accounts receivable Equipment (net) 2 3. Total 4. 6. 7. Debits 8. $ 68,000 36,000 111,000 $ 215,000 Credits Accounts Payable Note payable Common stock Retained earnings $ 44,000 58,800 21,000 91,200 $ 215,000 Tuition revenue in December 2020 was $80,000, and tuition revenue budgeted for January 2021 is $110,000. 55 percent of tuition revenue is collected in the month earned, and 45 percent is collected in the subsequent month. The receivable balance at the end of 2020 reflects tuition earned in December 2020. Monthly expenses (excluding interest expense) are budgeted as follows: salaries, $51.000; rent, $4,200; depreciation on equipment, $7,000; utilities, $2,100; other, $720. Expenses are paid in the month incurred. Purchases of equipment are paid in the month after purchase. The $44,000 payab at the end of 2020 represents money owed for the purchase of computer equipment in December 2020. The company intends to purchase $42,000 of computer equipment in January 2021. The anticipated $7,000 per month of depreciation (see number 4) reflects the addition of $2,100 of monthly depreciation related to this purchase. The note is at 14 percent per annum and requires monthly interest payments of $686. The payments are made on the 20th each month. The principal must be paid in February 2022. The tax rate is 20 percent. Ceradyne Budgeted Income Statement For the Month Ended January 31, 2021

Ceradyne operates a computer training center. The following data relate to the preparation of a master budget for January 2021 1. At the end of 2020, the company's general ledger indicated the following balances: Cash Accounts receivable Equipment (net) 2 3. Total 4. 6. 7. Debits 8. $ 68,000 36,000 111,000 $ 215,000 Credits Accounts Payable Note payable Common stock Retained earnings $ 44,000 58,800 21,000 91,200 $ 215,000 Tuition revenue in December 2020 was $80,000, and tuition revenue budgeted for January 2021 is $110,000. 55 percent of tuition revenue is collected in the month earned, and 45 percent is collected in the subsequent month. The receivable balance at the end of 2020 reflects tuition earned in December 2020. Monthly expenses (excluding interest expense) are budgeted as follows: salaries, $51.000; rent, $4,200; depreciation on equipment, $7,000; utilities, $2,100; other, $720. Expenses are paid in the month incurred. Purchases of equipment are paid in the month after purchase. The $44,000 payab at the end of 2020 represents money owed for the purchase of computer equipment in December 2020. The company intends to purchase $42,000 of computer equipment in January 2021. The anticipated $7,000 per month of depreciation (see number 4) reflects the addition of $2,100 of monthly depreciation related to this purchase. The note is at 14 percent per annum and requires monthly interest payments of $686. The payments are made on the 20th each month. The principal must be paid in February 2022. The tax rate is 20 percent. Ceradyne Budgeted Income Statement For the Month Ended January 31, 2021

Principles of Accounting Volume 2
Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter7: Budgeting
Section: Chapter Questions
Problem 13EA: What is the amount of budgeted cash payments if purchases are budgeted for $420,000 and the...
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Ceradyne operates a computer training center. The following data relate to the preparation of a master budget for January 2021. 1. At the end of 2020, the company's general ledger indicated the following balances: Cash Accounts receivable Equipment (net) Total 2. 3. 4. 5. 6. 7. 8. Debits Less Rent V Salaries $ 68,000 Depreciation 36,000 Utilities 111,000 Other expenses $ 215.000 Tuition revenue in December 2020 was $80,000, and tuition revenue budgeted for January 2021 is $110,000. 55 percent of tuition revenue is collected in the month earned, and 45 percent is collected in the subsequent month. The receivable balance at the end of 2020 reflects tuition earned in December 2020. Total expense Monthly expenses (excluding interest expense) are budgeted as follows: salaries, $51,000; rent, $4,200: depreciation on equipment, $7,000; utilities, $2,100; other, $720. Net income/(loss) Expenses are paid in the month incurred. Purchases of equipment are paid in the month after purchase. The $44,000 payable at the end of 2020 represents money owed for the purchase of computer equipment in December 2020. Credits The company intends to purchase $42,000 of computer equipment in January 2021. The anticipated $7,000 per month of depreciation (see number 4) reflects the addition of $2,100 of monthly depreciation related to this purchase. Accounts Payable Note payable. The note is at 14 percent per annum and requires monthly interest payments of $686. The payments are made on the 20th of each month. The principal must be paid in February 2022. The tax rate is 20 percent. Common stock Retained earnings V $ eTextbook and Media 44,000 58,800 21,000 91,200 $ 215,000 Ceradyne Budgeted Income Statement For the Month Ended January 31, 2021 V 51,000 i 4,200 7,000 i 2,100 i 720 i $ 1000
Transcribed Image Text:Ceradyne operates a computer training center. The following data relate to the preparation of a master budget for January 2021. 1. At the end of 2020, the company's general ledger indicated the following balances: Cash Accounts receivable Equipment (net) Total 2. 3. 4. 5. 6. 7. 8. Debits Less Rent V Salaries $ 68,000 Depreciation 36,000 Utilities 111,000 Other expenses $ 215.000 Tuition revenue in December 2020 was $80,000, and tuition revenue budgeted for January 2021 is $110,000. 55 percent of tuition revenue is collected in the month earned, and 45 percent is collected in the subsequent month. The receivable balance at the end of 2020 reflects tuition earned in December 2020. Total expense Monthly expenses (excluding interest expense) are budgeted as follows: salaries, $51,000; rent, $4,200: depreciation on equipment, $7,000; utilities, $2,100; other, $720. Net income/(loss) Expenses are paid in the month incurred. Purchases of equipment are paid in the month after purchase. The $44,000 payable at the end of 2020 represents money owed for the purchase of computer equipment in December 2020. Credits The company intends to purchase $42,000 of computer equipment in January 2021. The anticipated $7,000 per month of depreciation (see number 4) reflects the addition of $2,100 of monthly depreciation related to this purchase. Accounts Payable Note payable. The note is at 14 percent per annum and requires monthly interest payments of $686. The payments are made on the 20th of each month. The principal must be paid in February 2022. The tax rate is 20 percent. Common stock Retained earnings V $ eTextbook and Media 44,000 58,800 21,000 91,200 $ 215,000 Ceradyne Budgeted Income Statement For the Month Ended January 31, 2021 V 51,000 i 4,200 7,000 i 2,100 i 720 i $ 1000
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