Can you please provide steps on how you got each number? Thank you so much.

Klandon Company manufactures decorative rocks for aquariums. Kim Klandon is preparing the budget for the quarter ended June 30. She has gathered the following 1. Klandon's sales manager reported that the company sold 12,000 bags of rocks in March. He has developed the following sales forecast. The expected sales price is $10 per bag April 20,000 bags May 50,000 bags June 30,000 bags July 25,000 bags August 15,000 bags 2. Sales personnel receive a 5 percent commission on every bag of rocks sold. The following monthly fixed selling and administrative expenses are planned for the quarter. However, these amounts do not include the depreciation increase resulting from the budgeted equipment purchase in June (see part 7). Monthly Fixed Selling and Administrative Variable Cost/Unit Depreciation $10,000 Salaries of sales personnel 25,000 $0.50 Advertising 1,000 Management salaries 10,000 Miscellaneous 500 Bad debts 0.50 Total costs $46,500 $1.00 26 3. The standard labor allowed for one bag of rocks is 15 minutes. The current direct labor rate is $10 per hour. 4. After experiencing difficulty in supplying customers in a timely fashion due to inventory shortages, the company established a policy requiring the ending finished goods 27 inventory to equal 20 percent of the following month's budgeted sales, in units. On March 31, 4,000 bags were on hand. 5. Five pounds of raw materials are required to fill each bag of finished rocks. The company wants to have raw materials on hand at the end of each month equal to 10 percent of 28 the following month's production needs. On March 31, 13,000 pounds of materials were on hand. 6. The raw materials used in production cost $0.40 per pound. Half of the month's purchases is paid for in the month of purchase; the other half, in the following month. No 29 discount is available. 7. On June 1, the company plans to spend $48,000 to upgrade its office equipment that is fully depreciated. The new equipment is expected to have a five-year life, with no 30 residual value. 8. The budgeted monthly variable and total fixed overhead are as follows. Variable overhead is based on the number of units produced. The fixed overhead budget is based on 31 an annual production of 400,000 bags. 32 33 Fixed Monthly Overhead Variable Cost/Unit 34 Depreciation $8,000 35 Indirect materials 1,000 $0.05 36 Indirect labor 10.000 0.20 37 Utilities 20,000 0.10 38 Property taxes 5,000 39 Maintenance 6.000 0.15 40 Total costs $50,000 $0.50 41 9. All sales are made on account. Historically, the company has collected 70 percent of its sales in the month of sale and 25 percent in the month following the sale. The 42 remaining 5 percent of sales is uncollectible. 43 10. Klandon must maintain a minimum cash balance of $30,000. An open line of credit at a local bank allows the company to borrow up to $175,000 per quarter in $1,000 11. All borrowing is done at the beginning of the month, and all repayments are made at the end of a month in $1,000 increments. Accrued interest is paid only when principal is repaid. The interest rate is 12 percent per year. 12. A quarterly dividend of $49,000 will be declared and paid in April. 13. Income taxes payable for the first quarter will be paid on April 15. Klandon's tax rate is 30 percent. 14. The March 31 balance sheet is as follows: March 31 Cash $40,000 Accounts receivable 30,000 Finished goods inventory 26,000 Raw materials inventory 5.200 Plant & equipment 200,000 Accumulated Depreciation (50.000) Total assets $251.200 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 Accounts payable Income taxes payable Common stock Retained 3arnings Total liabilities and equities $12.000 50.000 52.000 137.200 $251.200 Required a. Prepare all components of Klandon's master budget for the second quarter. Required a. Prepare all components of Klandon's master budget for the second quarter. 63 64 65 66 67 68 69 70 71 Use the template's provided below to prepare the budgets and pro-forma statements. 72 Sales Budget 73 74 75 76 77 78 Budgeted units sold Budgeted sales price Budgeted sales revenue April 20,000 10 200,000 May 50,000 10 500,000 June 30,000 10 300,000 Quarter 100,000 10 1,000,000 $ $ $ $ $ $ $ $ May - June Quarter $ 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 Or solve your own way and solve the rest of the problem: Selling & Administrative Expense Budget April Depreciation Sales personnel compensation Advertising Management salaries Miscellaneous Bad debts 10,000 Total budgeted expenses $ 10,000 Less non-cash expenses Depreciation $ $ Bad debts 10,000 Total cash costs $ 25,000 25,000 15,000 50.000 50.000 $ $ 15,000 $ $ $ $ $ $ $ 25,000 15,000 50,000 $ $ $ $ Production Budget July June 30,000 Quarter 100,000 Budgeted unit sales + Budgeted ending inventory = Total units required Beginning inventory = Budgeted production April 20.000 10,000 30,000 May 50,000 6,000 56,000 10,000 46,000 100,000 30,000 6,000 24,000 30,000 100,000 Materials Purchase Budget 93 94 95 96 97 98 99 100 101 102 103 104 105 106 107 108 109 110 111 112 113 July April 30,000 May 46,000 June 24,000 Quarter 100,000 Budgeted production x Standard pounds/unit = Production needs + Budgeted ending inventory = Total pounds required - Beginning inventory = Budgeted purchases x Standard price/pound = Budgeted purchases cost Direct Labor Budget May April 30,000 June 24,000 Quarter 100,000 46,000 Budgeted production x Standard DLH/unit = Total direct labor hrs required x Standard wage rate = Budgeted direct labor cost $ $ $ 113 114 115 116 117 118 119 120 121 122 123 124 125 126 127 128 129 130 131 132 Manufacturing Overhead Budget April 30,000 May 46,000 June 24,000 Quarter 100,000 Budgeted production x Variable OH/unit = Total variable overhead + Fixed overhead Total budgeted Manufacturing OH Less: Non-cash items Depreciation = Total cash costs Ending Inventory and Costs of Goods Sold Budget Raw Materials Beginning Balance Purchases of raw materials Less: Ending rawy materials inventory Raw materials used $ 133 134 135 136 137 138 139 140 141 142 143 144 145 146 147 148 149 150 151 152 153 154 155 156 157 158 159 160 Finished Goods Unit costs Direct materials Direct labor Overhead Total standard unit cost x Ending inventory units Ending finished goods inventory Cost of Goods Sold Beginning work in process inventory Direct materials used Direct labor Manufacturing overhead Total manufacturing costs Less: Ending work in process inventory Cost of goods manufactured Add: Beginning finished goods inventory Less: Ending finished goods inventory Cost of goods sold 111:01 161 Cash Receipts Budget April May June Total Cash Receipts Bad Debts Accounts Receivable 162 163 164 165 166 167 168 169 170 171 172 173 174 175 March sales $120,000 x 25% April sales $200,000 x 70% $200,000 x 25% $200,000 x 5% May sales $500,000 x 70% $500,000 x 25% $500,000 x 5% June sales $300,000 x 70% $300,000 x 25% $300,000 x 5% Totals 176 177 $ $ $ $ $ Cash Payments for Materials Budget April May June Total Cash Payments Accounts Payable 178 179 180 181 182 183 184 185 186 187 188 189 190 191 A/P from March April purchases $56,000 x 50% $56,000 x 50% May purchases $88,600 x 50% $88,600 x 50% June purchases $56,800 x 50% $56,800 x 50% Total $ $ $ $ 192 Cash Budget April May June Quarter 193 194 195 196 197 198 199 200 201 202 203 204 205 206 207 208 209 210 211 212 213 214 215 216 217 Beginning cash balance Collections from sales Total cash available Less disbursements Materials purchases Direct labor Manufacturing overhead Selling & administrative expense Income taxes Equipment purchase Dividends Total cash disbursements Cash excess (deficiency) Minimum cash balance Cash excess (deficiency) Financing Borrowings Repayments Interest Total financing Ending cash balance $ $ $ Prepare a pro forma income statement for the second quarter. Solve Sales Cost of goods sold Gross profit Selling & administrative expense Operating income Interest expense Income before taxes Income tax expense (30%) Net income $ Prepare a pro forma balance sheet as of June 30 218 b. 219 220 221 222 223 224 225 226 227 228 229 230 231 232 C 233 234 235 236 237 238 239 240 241 242 243 244 245 246 247 248 Solve. Cash A/R Finished Goods Raw Materials Inventory Property, Plant & Equipment Less: Accumulated Depreciation Total Assets $ A/P Income Taxes Payable Note Payable Common Stock Retained Earnings Total Liabilities & Equities $ 249 250