2. Prepare a budgeted income statement for the first three months of 2020 and a budgeted balance sheet as of March 31, 2020. (9 marks] Question Asahi Glass Inc produces and distributes diferent kind of lastes. The information below about Asas operations has been cambled to vit budget preparation. The company is preparing master budget for the first quarter of 2071. The budget wil detall each month's activity and the activity for the quarter in total. The matter budget will be based on the following information Selling once was 547 per unit in 2009 and will not change during 2020 Actual and Estimated Sales are as follow- Estimated 2020 January 23,000 February 25,000 units March 21.000 units April 25,000 units May 20.000 unts The company produces enough units each month to meet that month's sales plus a desired Inventory level equal to 20% of next month's estimated sales Finished goods inventory at the end of 2019 consisted of 2,000 units The company purchases enough raw materials each month for the current month's production requirement and 20% of next mont's production requirement. Each unit of product retuires + lograms of raw material 0.50 per kilogram. There were 25,000 ograms of raw materials in inventory at the end of 2019. All pay 40% of the raw material purchases in the month of purchase and the remaining 60% in the following month a unit of finished product requires 1.6 labor-hours. The average wage rate is $20 per hour e Variable manufacturing overtread is 40% of the direct labor cost. Sales are 30% in cash and 20% in credit. Credit sales are collected in the month following sale. Fiwed manufacturing overhead costs per month are as follows- Factory Manager's Salary $6.500 Factory Insurance $3,400 Factory Rent 545.000 Depreciation of factory equipment 52.000 Totalfred S&A esperes are as follows Advertising $ 3.000 Depreciation $ 8.000 Insurance $ 750 Salaries $ 5.000 Other 53.90 Variable selling and adminitrative expenses consist of $3.5/une for shipping and 12% of sales for Con $70,000 512.000 14,500 The balance sheet as of December 31, 2019 is as follows Anet Cash Accounts Receivable Inventory Raw Materials $ 12.500 Inventory Finished Goods 82.000 Plant and Equipment $1.100.000 Les Accumulated Depreciation (180.000 Total Assets Liabilities and Equity Accounts Payable Long Term Notes payable Common Shares Retained Earning Total Lilities and Shareholder's touty Additional information is as follows 920,000 $1.996,500 5 27,500 119,000 635.000 115,000 $1.596,500 1 The balance sheet as of December 31, 2019 is as follows- Assets Cash $ 70,000 Accounts Receivable 512,000 Inventory: Raw Materials $ 12,500 Inventory: Finished Goods 82,000 94,500 Plant and Equipment $1,100,000 Less: Accumulated Depreciation (180,000) 920,000 Total Assets $1,596,500 Liabilities and Equity Accounts Payable $ 27,500 Long-Term Notes payable 819,000 Common Shares 635,000 Retained Earnings 115,000 Total Liabilities and Shareholder's Equity $1,596,500 Additional information is as follows - All cash payments except purchases of raw materials are made monthly as incurred All borrowings occur at the beginning of each month, and all repayments occur at the end of the month. Ignore interest rates and income tax A minimum cash balance of $60,000 is required at the end of each month. Required: 1. Prepare the following budgets for each of the first three months of 2020. (21 marks] a. Sales budget. b. Production budget. c. Raw materials purchases budget. d. Direct labour and manufacturing overhead budget. e. Ending finished goods inventory budget f. Selling and administrative budget. 8. Cash budget 2. Prepare a budgeted income statement for the first three months of 2020 and a budgeted balance sheet as of March 31, 2020. 19 marks]