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The Gilder Tire Company manufactures racing tires for bicycles. Gilder sells tires for $$75$ each. d$.$ Raw Materials Inventory on December $31,2024,$ consists of $1,200$ pounds of rubber compound

used to manufacture the tires.

e$.$ Direct materials requirements are two pounds of a rubber compound per tire. The cost of the

compound is $$8\mathrm{.}50$ per pound.

f$.$ Desired ending Raw Materials Inventory is $20\%$ of the next quarter's direct materials needed for

production; desired ending inventory for December $31,2025$ is $1,200$ pounds; indirect materials are

insignificant and not considered for budgeting purposes.

g$.$ Each tire requires $0\mathrm{.}40$ hours of direct labor; direct labor costs average $$8$ per hour.

h$.$ Variable manufacturing overhead is $$3$ per tire.

i$.$ Fixed manufacturing overhead includes $$2,000$ per quarter in depreciation and $$16,778$ per quarter

for other costs, such as utilities, insurance, and property taxes.

j$.$ Fixed selling and administrative expenses include $$9,000$ per quarter for salaries; $$5,700$ per

quarter for rent; $$1,500$ per quarter for insurance; and $$1,500$ per quarter for depreciation.

k$.$ Variable selling and administrative expenses include supplies at $1\%$ of sales.

I. Capital expenditures include $$55,000$ for new manufacturing equipment, to be purchased and paid

in the first quarter.

m$.$ Cash receipts for sales on account are $70\%$ in the quarter of the sale and $30\%$ in the quarter

following the sale; December $31,2024,$ Accounts Receivable is received in the first quarter of $2025$;

uncollectible accounts are considered insignificant and not considered for budgeting purposes.

n$.$ Direct materials purchases are paid $50\%$ in the quarter purchased and $50\%$ in the following quarter;

December $31,2024,$ Accounts Payable is paid in the first quarter of $2025.$

o$.$ Direct labor, manufacturing overhead, and selling and administrative costs are paid in the quarter

incurred.

p$.$ Income tax expense is projected at $$3,500$ per quarter and is paid in the quarter incurred.

q$.$ Gilder desires to maintain a minimum cash balance of $$70,000$ 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 $4\%$ per year and paid at the beginning of the quarter based on the amount outstanding from the

previous quarter. $($Unless otherwise noted, assume all of the following events occurred during $2024$ and that any balances

given are stated as of December $31,2024.)$

a$.$ Budgeted sales are $2,000$ tires for the first quarter and expected to increase by $200$ tires per quarter.

Cash sales are expected to be $30\%$ of total sales, with the remaining $70\%$ of sales on account.

Data table

$\backslash$table$[[,,,,],[$Assets$],[$Current Assets:$],[$Cash$,$$$,70,000,,],[$Accounts Receivable,,$30,000,,],[$Raw Materials Inventory,,$10,200,,],[$Finished Goods Inventory,,$19,200,,],[$Total Current Assets,,,$$,129,400],[$Property$,$ Plant, and Equipment:$],[$Equipment$,,183,000,,],[$Less: Accumulated Depreciation,,$(39,000),,144,000],[$Total Assets,,,$$,273,400],[$Liabilities$],[$Current Liabilities:$],[$Accounts Payable,,,$$,6,000],[$Stockholders$\text{'}$ Equity$],[$Common Stock, no par,$$,140,000,,],[$Retained Earnings,,$127,400,,],[$Total Stockholders' Equity,,,,$267,400],[$Total Liabilities and Stockholders' Equity,,,$$\_\_,273,400]]$

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