a. The company expects 30% of sales to be for cash and the remaining 70% on credit. Receivables are collected in full in the month following the sale (none are collected in the month of the sale).

b. All raw materials purchases are on credit, and no payables arise from any other transactions. One months raw materials purchases are fully paid in the next month.

c. The minimum ending cash balance for all months is $40,000. If necessary, the company borrows enough cash using a short-term note to reach the minimum. Short-term notes require an interest payment of 1% at each month-end (before any repayment). If the ending cash balance exceeds the minimum, the excess will be applied to repaying the short-term notes payable balance.

d. Dividends of $10,000 are to be declared and paid in May.

e. No cash payments for income taxes are to be made during the second calendar quarter. Income tax will be assessed at 35% in the quarter and paid in the third calendar quarter.

f. Equipment purchases of $130,000 are budgeted for the last day of June.

8. Cash budget.

9. Budgeted income statement for the entire second quarter (not for each month separately).

10. Budgeted balance sheet.

ZIGBY MANUFACTURING Estimated Balance Sheet March 31, 2017 Assets Cash $ 40,000 Accounts receivable 342,248 Raw materials inventory 98,500 Finished goods inventory 325,540 Total current assets 806,288 Equipment, gross 600,000 Accumulated depreciation (150,000 ) Equipment, net 450,000 Total assets $ 1,256,288 Liabilities and Equity Accounts payable $ 200,500 Short-term notes payable 12,000 Total current liabilities 212,500 Long-term note payable 500,000 Total liabilities 712,500 Common stock 335,000 Retained earnings 208,788 Total stockholders equity 543,788 Total liabilities and equity $ 1,256,288