To find an error, you should do all of the following EXCEPT a. ...

[tiara099]

To find an error, you should do all of the following EXCEPT
 a. double-check every entry.
   b. find the difference between debits and credits.
   c. erase questionable entries.
   d. retrace any math computations.

Question 2

Russell Company has the following projected account balances for June 30, 2015:
 
  Accounts payable 80,000 Sales 1,600,000
   Accounts receivable 200,000 Capital stock 800,000
   Depreciation, factory 48,000 Retained earnings ?
   Inventories (5/31 & 6/30) 360,000 Cash 112,000
   Direct materials used 400,000 Equipment, net 480,000
   Office salaries 160,000 Buildings, net 800,000
   Insurance, factory 8,000 Utilities, factory 32,000
   Plant wages 280,000 Selling expenses 120,000
   Bonds payable 320,000 Maintenance, factory 56,000
 
  Required:
  a. Prepare a budgeted income statement for June 2015
  b. Prepare a budgeted balance sheet as of June 30, 2015.

[Kingjoffery]

Answer to Question 1

c

Answer to Question 2

Answer:
a. Russell Company
Budgeted Income Statement
For the Month of June 2015

Sales 1,600,000
Cost of goods sold:
Materials used 400,000
Wages 280,000
Depreciation 48,000
Insurance 8,000
Maintenance 56,000
Utilities 32,000 824,000
Gross profit 776,000
Operating expenses:
Selling expenses 120,000
Office salaries 160,000 280,000
Net income 496,000

b. Russell Company
Budgeted Balance Sheet
June 30, 2015

Assets: Liabilities and Owners' Equity:
Cash  112,000 Accounts payable  80,000
Accounts receivable 200,000 Bonds payable 320,000
Inventories 360,000 Capital stock 800,000
Equipment, net 480,000 Retained earnings 752,000
Buildings, net 800,000
Total 1,952,000 Total 1,952,000

1,952,000 - (80,000 + 320,000 + 800,000) = 752,000