#10 dividends of $15,000 NOT $20,000

Additional Information The company's chief financial officer (CFO), in consultation with various managers across the organization has developed the following set of assumptions to help create the 2022 budget: The budgeted unit sales are 12,000 units, 37,000 units, 15,000 units and 25,000 units for quarters 1-4, respectively. Notice that the company experiences peak sales in the second and fourth quarters. The budgeted selling price for the year is 833 per unit. The budgeted unit sales for the first quarter of 2023 is 13,000 units 2 All sales are on credit Uncollectible accounts are negligible and can be ignored, Seventy-five percent of all credit sales are collected in the quarter of the sale and 25% are collected in the subsequent quarter, 3 Each quarter's ending finished goods inventory should equal 15% of the next quarter's unit sales 4 Each unit of tinished goods requires 3.5 yards of raw material that costs $3.25 per yard. Each quarter's ending raw materials inventory should equal 10% of the next quarter's production needs. The estimated ending raw materials inventory on Dececember 31,2022 is 5,000 yards Seventy-five percent of each quarter's purchases are paid for in the quarter of purchase. The remaining 25% of each quarter's purchases are paid in the following quarter 6 Direct laborers are paid $20 an hour and each unit of finished goods requires 0.25 direct labor-hours to complete. All direct labor costs are paid in the quarter incurred 7 The budgeted variable manufacturing overhead per direct labor-hour is $3.25. The quarterly fixed manufacturing overheat is $150.000 including $20,000 of depreciation on equipment. The number of direct labor-bours is used as the allocation base for the budgeted plantwide overhead rate. All overhead costs (excluding depreciation are paid in the quarter incurred * The budgeted variable selling and administrative expense is $1.25 per unit sold. The fixed selling and administrative expenses per quarter include advertising (520.000), executive salaries ($64.000), insurance ($13,000) property tax ($8,000) and depreciation expense (58,000). All selling and administrative expenses (excluding depreciation) are paid in the quarter incurred 9 The company plans to maintain a minimum cash balance at the end of each quarter of $40,000. Assume that any borrowings take place on the first day of the quarter. To the extent possible, the company will repay principal and interest on any borrowings on the Last day of the fourth quarter. The company's tender imposed a simple interest rate of 5% per quarter on any borrowings 10 Dividends of $20,000 will be declared and paid in each quarter IThe companmy uses a last-in, first-out (LIFO) inventory flow assumption. This means that the most recently purchased raw materials are the "first-out" to production and most recently completed finished goods are the "first-out" to customers. Required: The company's CFO has asked you to prepare the 2022 master budget. To fulfill this request, prepare the following budget schedules and financial statements 1 Quarterly sales budget including a schedule of expected cash collections 2 Quarterly production budget 3 Quarterly direct materials budget including a schockte of expected cash disbursements for purchases of materials 4 Quarterly direct labor budget $ Quarterly manufacturing overhead budget 6 Tinding finishod goods inventory budget at December 31, 2022 7 Quarterly selling and administrative experie budget * Quarterly cash budget 9 Income Statement for the year ended Decem er 31,2022 10 Balance Sheet as December 31, 2022 LMN Company Balance Sheet December 31, 2021 Assets Current Assets: Cash Accounts Receivable (net) Raw materials inventory (4,500 yards) Finished goods inventory (1,500 units) Total current assets 46,200 260,000 11,250 32,250 349,700 Plant and equipment: Buildings and equipment Accumulated depreciation Plant and equipment, net 900,000 -292,000 608,000 Total Assets 957,700 Liabilities and Stockholders' Equity 158,000 Current liabilities: Accounts Payable Stockholders' equity: Common stock Retained earnings Total stockholders; equty 419,800 379,900 799,700 Total liabilities and stockholder's equity 957,700 Boxes highlighted in yellow contain automatic addition, subtraction multiplication or division formulas LMIN Company Budgefed Balance Sheet December 31, 2022 Current Assets Cash Accounts receivable Raw materials inventory Finished goods inventory Total current assets Plant and Equipment Buildings and equipment Accumulated depreciation (enter has a negative number) Plant and equipment, net Total assets 0 0 Lailiries and Stockholders' Equity Current liabilities Accounts payable raw materials) Stockholders' equity Common stock, no pur Retained earnings Total stockholders equity Total liabilities and stockholdenequity 0 Titolo mantepwal Total Liabilities & Stockholders' Eywiry Follow the format Example of 377 Boxes highlighted in yellow contain automatic addition, subtraction, multiplication or division formulas LMN Company Budgeted income Statement For the Year Ended December 31, 2022 (Absorption costing basis) Sales 0 Cost of goods sold Gross margin Selling and Administrative expenses Net operating income Interest expense Net income 0 0 Boxes highlighted in yellow contain automatic addition, subtraction, multiplication or division formulas LMN Company Selling and Administrative Expense Budget For the Year Ended December 31, 2022 Quarter 2 3 Total 0 Budgeted units sales (Schedule 1) Variable Selling & administrative expense per unit Total Variable selling and administrative exponie 0 0 0 0 0 0 0 Fixed selling and administrative expenses Advertising Executive Salaries Insurance Property taxes Depreciation Total fixed selling and administrative expenses Total selling and administrative expenses Less depreciation Cash disbursements for selling and administrative expenses O 0 0 0 0 0 0 0 0 0 CHECK FIGURE: Total selling and administrative expenses = 5563.250 Boxes highlighted in yellow contain automatic addition, subtraction, multiplication of division formulas LMN Company Ending Finished Goods laventory Budget (absorption costing basid) For the Year Ended December 31, 2022 Quantity Cost Total yards 0 Item Production cost per unit: Direct materials Direct labor Manufacturing overhead Unit product cost (DM-DL + ManufO/H) per yard per hour per hour bours bours 0 0 0 Budgeted finished goods inventory Units from prior year's production Unit product cost Cost from prior year's production (units x product cost) Units from current year's production Unit product cost Cost from current year's production (units x product cost) > 0 Cost of ending finished goods inventory (Cost from prior year's production Cost from current year's production) CHECK FIGURE: Cost of ending finished goods inventory = $43,003 Boxes highlighted in yellow contain automatic addition, subtraction, multiplication of division formulas LMN Company Direct Materials Budget For the Year Ended December 31, 2022 Qwerter Total 0 0 0 0 Required production in units Quantity of raw materials needed per unit Quantity of raw materials needed to meet production Add desired quantity of ending raw materials inventory Total quantity of raw materials needed Less quantity of beginning ww materials inventory Quantity of raw materials to be purchased Cost of uw materials per yard Cost of raw materials to be purchased 0 0 0 0 0 0 0 O Schedule of Expected Cash Disbursements for Purchases of Materials 0 0 0 Beginning accounts payable First quarter purchases Second quarter purchases Third quarter purchases Fourth quarter purchases Total cash disbursements for materials 0 0 0 CHECK FIGURE: Total cash disbursements for materials for the year - $1,113,679 Additional Information The company's chief financial officer (CFO), in consultation with various managers across the organization has developed the following set of assumptions to help create the 2022 budget: The budgeted unit sales are 12,000 units, 37,000 units, 15,000 units and 25,000 units for quarters 1-4, respectively. Notice that the company experiences peak sales in the second and fourth quarters. The budgeted selling price for the year is 833 per unit. The budgeted unit sales for the first quarter of 2023 is 13,000 units 2 All sales are on credit Uncollectible accounts are negligible and can be ignored, Seventy-five percent of all credit sales are collected in the quarter of the sale and 25% are collected in the subsequent quarter, 3 Each quarter's ending finished goods inventory should equal 15% of the next quarter's unit sales 4 Each unit of tinished goods requires 3.5 yards of raw material that costs $3.25 per yard. Each quarter's ending raw materials inventory should equal 10% of the next quarter's production needs. The estimated ending raw materials inventory on Dececember 31,2022 is 5,000 yards Seventy-five percent of each quarter's purchases are paid for in the quarter of purchase. The remaining 25% of each quarter's purchases are paid in the following quarter 6 Direct laborers are paid $20 an hour and each unit of finished goods requires 0.25 direct labor-hours to complete. All direct labor costs are paid in the quarter incurred 7 The budgeted variable manufacturing overhead per direct labor-hour is $3.25. The quarterly fixed manufacturing overheat is $150.000 including $20,000 of depreciation on equipment. The number of direct labor-bours is used as the allocation base for the budgeted plantwide overhead rate. All overhead costs (excluding depreciation are paid in the quarter incurred * The budgeted variable selling and administrative expense is $1.25 per unit sold. The fixed selling and administrative expenses per quarter include advertising (520.000), executive salaries ($64.000), insurance ($13,000) property tax ($8,000) and depreciation expense (58,000). All selling and administrative expenses (excluding depreciation) are paid in the quarter incurred 9 The company plans to maintain a minimum cash balance at the end of each quarter of $40,000. Assume that any borrowings take place on the first day of the quarter. To the extent possible, the company will repay principal and interest on any borrowings on the Last day of the fourth quarter. The company's tender imposed a simple interest rate of 5% per quarter on any borrowings 10 Dividends of $20,000 will be declared and paid in each quarter IThe companmy uses a last-in, first-out (LIFO) inventory flow assumption. This means that the most recently purchased raw materials are the "first-out" to production and most recently completed finished goods are the "first-out" to customers. Required: The company's CFO has asked you to prepare the 2022 master budget. To fulfill this request, prepare the following budget schedules and financial statements 1 Quarterly sales budget including a schedule of expected cash collections 2 Quarterly production budget 3 Quarterly direct materials budget including a schockte of expected cash disbursements for purchases of materials 4 Quarterly direct labor budget $ Quarterly manufacturing overhead budget 6 Tinding finishod goods inventory budget at December 31, 2022 7 Quarterly selling and administrative experie budget * Quarterly cash budget 9 Income Statement for the year ended Decem er 31,2022 10 Balance Sheet as December 31, 2022 LMN Company Balance Sheet December 31, 2021 Assets Current Assets: Cash Accounts Receivable (net) Raw materials inventory (4,500 yards) Finished goods inventory (1,500 units) Total current assets 46,200 260,000 11,250 32,250 349,700 Plant and equipment: Buildings and equipment Accumulated depreciation Plant and equipment, net 900,000 -292,000 608,000 Total Assets 957,700 Liabilities and Stockholders' Equity 158,000 Current liabilities: Accounts Payable Stockholders' equity: Common stock Retained earnings Total stockholders; equty 419,800 379,900 799,700 Total liabilities and stockholder's equity 957,700 Boxes highlighted in yellow contain automatic addition, subtraction multiplication or division formulas LMIN Company Budgefed Balance Sheet December 31, 2022 Current Assets Cash Accounts receivable Raw materials inventory Finished goods inventory Total current assets Plant and Equipment Buildings and equipment Accumulated depreciation (enter has a negative number) Plant and equipment, net Total assets 0 0 Lailiries and Stockholders' Equity Current liabilities Accounts payable raw materials) Stockholders' equity Common stock, no pur Retained earnings Total stockholders equity Total liabilities and stockholdenequity 0 Titolo mantepwal Total Liabilities & Stockholders' Eywiry Follow the format Example of 377 Boxes highlighted in yellow contain automatic addition, subtraction, multiplication or division formulas LMN Company Budgeted income Statement For the Year Ended December 31, 2022 (Absorption costing basis) Sales 0 Cost of goods sold Gross margin Selling and Administrative expenses Net operating income Interest expense Net income 0 0 Boxes highlighted in yellow contain automatic addition, subtraction, multiplication or division formulas LMN Company Selling and Administrative Expense Budget For the Year Ended December 31, 2022 Quarter 2 3 Total 0 Budgeted units sales (Schedule 1) Variable Selling & administrative expense per unit Total Variable selling and administrative exponie 0 0 0 0 0 0 0 Fixed selling and administrative expenses Advertising Executive Salaries Insurance Property taxes Depreciation Total fixed selling and administrative expenses Total selling and administrative expenses Less depreciation Cash disbursements for selling and administrative expenses O 0 0 0 0 0 0 0 0 0 CHECK FIGURE: Total selling and administrative expenses = 5563.250 Boxes highlighted in yellow contain automatic addition, subtraction, multiplication of division formulas LMN Company Ending Finished Goods laventory Budget (absorption costing basid) For the Year Ended December 31, 2022 Quantity Cost Total yards 0 Item Production cost per unit: Direct materials Direct labor Manufacturing overhead Unit product cost (DM-DL + ManufO/H) per yard per hour per hour bours bours 0 0 0 Budgeted finished goods inventory Units from prior year's production Unit product cost Cost from prior year's production (units x product cost) Units from current year's production Unit product cost Cost from current year's production (units x product cost) > 0 Cost of ending finished goods inventory (Cost from prior year's production Cost from current year's production) CHECK FIGURE: Cost of ending finished goods inventory = $43,003 Boxes highlighted in yellow contain automatic addition, subtraction, multiplication of division formulas LMN Company Direct Materials Budget For the Year Ended December 31, 2022 Qwerter Total 0 0 0 0 Required production in units Quantity of raw materials needed per unit Quantity of raw materials needed to meet production Add desired quantity of ending raw materials inventory Total quantity of raw materials needed Less quantity of beginning ww materials inventory Quantity of raw materials to be purchased Cost of uw materials per yard Cost of raw materials to be purchased 0 0 0 0 0 0 0 O Schedule of Expected Cash Disbursements for Purchases of Materials 0 0 0 Beginning accounts payable First quarter purchases Second quarter purchases Third quarter purchases Fourth quarter purchases Total cash disbursements for materials 0 0 0 CHECK FIGURE: Total cash disbursements for materials for the year - $1,113,679