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    The Goldberg Tire Company Manufactures Racing Tires For Bicycles Goldberg

    Uploaded by

    Amit Pandey
    The document provides information to prepare operating and financial budgets for Goldberg Tire Company for 2015. It details that Goldberg manufactures racing tires for bicycles and sells them for $50 each. It provides data on budgeted sales, inventory levels, materials costs, labor costs, manufacturing and selling expenses, capital expenditures, cash receipts and payments, taxes, and borrowing to develop quarterly and annual budgets. The budgets required include sales, production, materials, labor, manufacturing overhead, cost of goods sold, selling expenses, cash receipts, cash payments, cash budget, income statement, balance sheet, and cash flow statement.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd

    The Goldberg Tire Company Manufactures Racing Tires For Bicycles Goldberg

    Uploaded by

    Amit Pandey
    67 views2 pages
    The document provides information to prepare operating and financial budgets for Goldberg Tire Company for 2015. It details that Goldberg manufactures racing tires for bicycles and sells them for $50 each. It provides data on budgeted sales, inventory levels, materials costs, labor costs, manufacturing and selling expenses, capital expenditures, cash receipts and payments, taxes, and borrowing to develop quarterly and annual budgets. The budgets required include sales, production, materials, labor, manufacturing overhead, cost of goods sold, selling expenses, cash receipts, cash payments, cash budget, income statement, balance sheet, and cash flow statement.

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    The Goldberg Tire Company Manufactures Racing Tires for Bicycles Goldberg

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    The document provides information to prepare operating and financial budgets for Goldberg Tire Company for 2015. It details that Goldberg manufactures racing tires for bicycles and sells them for $50 each. It provides data on budgeted sales, inventory levels, materials costs, labor costs, manufacturing and selling expenses, capital expenditures, cash receipts and payments, taxes, and borrowing to develop quarterly and annual budgets. The budgets required include sales, production, materials, labor, manufacturing overhead, cost of goods sold, selling expenses, cash receipts, cash payments, cash budget, income statement, balance sheet, and cash flow statement.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    67 views2 pages

    The Goldberg Tire Company Manufactures Racing Tires For Bicycles Goldberg

    Uploaded by

    Amit Pandey
    The document provides information to prepare operating and financial budgets for Goldberg Tire Company for 2015. It details that Goldberg manufactures racing tires for bicycles and sells them for $50 each. It provides data on budgeted sales, inventory levels, materials costs, labor costs, manufacturing and selling expenses, capital expenditures, cash receipts and payments, taxes, and borrowing to develop quarterly and annual budgets. The budgets required include sales, production, materials, labor, manufacturing overhead, cost of goods sold, selling expenses, cash receipts, cash payments, cash budget, income statement, balance sheet, and cash flow statement.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 2

    Solved: The Goldberg Tire Company manufactures racing

    tires for bicycles Goldberg


    The Goldberg Tire Company manufactures racing tires for bicycles Goldberg

    The Goldberg Tire Company manufactures racing tires for bicycles. Goldberg sells tires for $ 50
    each. Goldberg is planning for the next year by developing a master budget by quarters.
    Goldberg’s balance sheet for December 31, 2014, follows:

    Other data for Goldberg Tire Company:


    a. Budgeted sales are 900 tires for the first quarter and expected to increase by 100 tires per
    quarter. Cash sales are expected to be 30% of total sales, with the remaining 70% sales on
    account.
    b. Finished Goods Inventory on December 31 consists of 200 tires at $ 29 each.
    c. Desired ending Finished Goods Inventory is 40% of the next quarter’s sales; first quarter
    sales for 2016 are expected be 1,300 tires. FIFO inventory costing method is used. d. Direct
    materials cost is $ 15 per tire.
    e. Desired ending Raw Materials Inventory is 20% of the next quarter’s direct materials needed
    for production; desired ending inventory for December 31 is $ 3,000; indirect materials are
    insignificant and not considered for budgeting purposes.
    f. Each tire requires 0.20 hours of direct labor; direct labor costs average $ 18 per hour.
    g. Variable manufacturing overhead is $ 2 per tire.

    h. Fixed manufacturing overhead includes $ 3,000 per quarter in depreciation and $ 4,232 per
    quarter for other costs, such as utilities, insurance, and property taxes.
    i. Fixed selling and dministrative expenses include $ 9,000 per quarter for salaries; $ 3,000 per
    quarter for rent; $ 600 per quarter for insurance; and $ 500 per quarter for depreciation.
    j. Variable selling and administrative expenses include supplies at 1% of sales.
    k. Capital expenditures include $ 20,000 for new manufacturing equipment, to be purchased
    and paid in the first quarter.
    l. Cash receipts for sales on account are 50% in the quarter of the sale and 50% in the quarter
    following the sale; December 31, 2014, Accounts Receivable is received in the first quarter of
    2015; uncollectible accounts are considered insignificant and not considered for budgeting
    purposes.
    m. Direct materials purchases are paid 75% in the quarter purchased and 25% in the following
    quarter; December 31, 2014, Accounts Payable is paid in the first quarter of 2015.
    n. Direct labor, manufacturing overhead, and selling and administrative costs are paid in the
    quarter incurred.
    o. Income tax expense is projected at $ 2,000 per quarter and is paid in the quarter incurred.
    p. Goldberg desires to maintain a minimum cash balance of $ 25,000 and borrows from the
    local bank as needed in increments of $ 1,000 at the beginning of the quarter; principal
    repayments are made at the beginning of the quarter when excess funds are available and in
    increments of $ 1,000; interest is 12% per year and paid at the beginning of the quarter based

    Reach out to [email protected] for enquiry.


    on the amount outstanding from the previous quarter.

    Requirements
    1. Prepare Goldberg’s operating budget and cash budget for 2015 by quarter. Required
    schedules and budgets include: sales budget, production budget, direct materials budget, direct
    labor budget, manufacturing overhead budget, cost of goods sold budget, selling and
    administrative expense budget, cash receipts, cash payments, and cash budget. Manufacturing
    overhead costs are allocated based on direct labor hours.
    2. Prepare Goldberg’s annual financial budget for 2015, including budgeted income statement,
    budgeted balance sheet, and budgeted statement of cashflows.

    The Goldberg Tire Company manufactures racing tires for bicycles Goldberg

    ANSWER
    https://solvedquest.com/the-goldberg-tire-company-manufactures-racing-tires-for-bicycles-
    goldberg/

    Reach out to [email protected] for enquiry.


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