Krause Industries’ balance sheet at December 31, 2019, is presented below. KRAUSE INDUSTRIES Balance Sheet December 31, 2019 Assets Current Assets                 Cash         $7,500       Accounts receivable         73,500       Finished goods inventory (1,500 units)         26,320         Total current assets         107,320   Property, Plant, and Equipment                 Equipment     $40,010           Less: Accumulated depreciation     10,200   29,810               Total assets         $137,130   Liabilities and Stockholders' Equity Liabilities                 Notes payable         $27,820       Accounts payable         45,040         Total liabilities         72,860   Stockholders' Equity                 Common stock     $38,930           Retained earnings     25,340             Total stockholders' equity         64,270               Total liabilities and stockholders' equity         $137,130   Budgeted data for the year 2020 include the following.     2020     Quarter 4   Total Sales budget (8,000 units at $32)   $76,800   $256,000 Direct materials used   11,280   62,500 Direct labor   12,500   50,900 Manufacturing overhead applied   10,000   48,600 Selling and administrative expenses   15,250   75,000 To meet sales requirements and to have 2,500 units of finished goods on hand at December 31, 2020, 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 2020, the company expects to declare and pay an $10,450 cash dividend. The company’s cash budget shows an expected cash balance of $5,880 at December 31, 2020. 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 2020, the company expects to purchase additional equipment costing $9,380. $7,212 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 $9,450 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, 2020, includes amounts due suppliers (see above) plus other accounts payable relating to manufacturing overhead of $7,540. Unpaid income taxes at December 31 will be $7,700. A. Prepare a budgeted statement of cost of goods sold.

Krause Industries’ balance sheet at December 31, 2019, is presented below.

Budgeted data for the year 2020 include the following.

To meet sales requirements and to have 2,500 units of finished goods on hand at December 31, 2020, 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 2020, the company expects to declare and pay an $10,450 cash dividend.

The company’s cash budget shows an expected cash balance of $5,880 at December 31, 2020. 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 2020, the company expects to purchase additional equipment costing $9,380. $7,212 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 $9,450 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, 2020, includes amounts due suppliers (see above) plus other accounts payable relating to manufacturing overhead of $7,540. Unpaid income taxes at December 31 will be $7,700.

A. Prepare a budgeted statement of cost of goods sold.