I NEED THE ANSWERS WHICH ARE WRONG IN RED Problem 236A Kraus

I NEED THE ANSWERS WHICH ARE WRONG IN RED

Problem 23-6A Krause Industries\' balance sheet at December 31, 2016, is presented below KRAUSE INDUSTRIES Balance Sheet December 31, 2016 Assets Current Assets Cash Accounts receivable Finished goods inventory (1,500 units) $7,500 73,500 25,380 106,380 Total current assets Property, Plant, and Equipment Equipment $40,770 10,060 30,710 Total assets $137,090 Liabilities and Stockholders\' Equity Notes payable Accounts payable $27,840 45,050 72,890 Total liabilities Stockholders\' Equity $38,900 25,300 Common stock Retained earnings Total stockholders\' equity 64,200 Total liabilities and stockholders\' equity $137,090 Budgeted data for the year 2017 include the following. 2017 Quarter 4 Total $76,800 $256,000 12,130 62,500 12,500 50,900 10,000 50,280 15,160 75,000 Sales budget (8,000 units at $32) Direct materials used Direct labor Manufacturing overhead applied Selling and administrative expenses To meet sales requirements and to have 2,500 units of finished goods on hand at December 31, 2017, the production budget shows 9,000 required units of output. The total unit cost of production is expected to be $18 Krause uses the first-in, first-out (FIFO) inventory costing method. Interest expense is expected to be $3,500 for the year. Income taxes are expected to be 40% of income before income taxes. In 2017, the company expects to declare and pay an $9 ,960 cash dividend. The company\'s cash budget shows an expected cash balance of $5,880 at December 31, 2017. All sales and purchases are on account. It is expected that 60% of quarterly sales are collected in cash within the quarter and the remainder is collected in the following quarter. Direct materials purchased from suppliers are paid 50% in the quarter incurred and the remainder in the following quarter. Purchases in the fourth quarter were the same as the materials used. In 2017, the company expects to purchase additional equipment costing $11,520. $11,781 of depreciation expense on equipment is included in the budget data and split equally between manufacturing overhead and selling and administrative expenses. Krause expects to pay $9,940 on the outstanding notes payable balance plus all interest due and payable to December 31 (included in interest expense $3,500, above). Accounts payable at December 31, 2017, includes amounts due suppliers (see above) plus other accounts payable of $8,390. Unpaid income taxes at December 31 will be $5,390.

Solution

Gross profit= 111940

Retained earnings 01/01/17 should be correct

Notes payable is long term liability and amount= 17900

Accounts payable= 50% of materials used in quarter 4 plus 8390= 12130*50% +8390 = 14455

Income tax payable is a current liability and the amount= 5390