Wilson Company uses a comprehensive planning and budgeting system. The proper order for Wilson to prepare certain budget schedules would be A. Income statement, balance sheet, statement of cash flows, and cost of goods sold.
B. Cost of goods sold, balance sheet, income statement, and statement of cash flows.
C. Statement of cash flows, cost of goods sold, income statement, and balance sheet.
D. Cost of goods sold, income statement, balance sheet, and statement of cash flows.
A. The budget for cost of goods sold is prepared before the budgeted income statement and before any of financial budgets (capital budget, cash budget, budgeted balance sheet, budgeted statement of cash flows).
B. The income statement is an input to the balance sheet, so the income statement is prepared before the balance sheet.
C. The statement of cash flows is the last financial statement to be prepared in the budgeting process.
D. Cost of goods sold is a part of operating budget which culminates in the preparation of the budgeted income statement. The budgeted income statement is an input to the budgeted balance sheet, and the budgeted statement of cash flows is the last to be prepared in the budgeting process.
