k. Dividends of$20,000 are budgeted to be declared and paid in May. I. No cash payments for income taxes are budgeted in the second calendar quarter. Income tax will be assessed at 35% in the quarter and budgeted to be paid in the third calendar quarter. n1. Equipment purchases of $100,000 are budgeted for the last dag,r ofJune. Required: Prepare the following budgets for the months of April, May. and June: 1. Sales budget. 2 Production budget. 3. Direct materials budget. 4. Direct labor budget. 5. Factor),r overhead budget. 6. Selling expense budget. 7. General and administrative expense budget. 8. Schedule of cash receipts. 9. Schedule of cash payments for direct materials. 10. Cash budget. 11. Budgeted income statement for entire second quarter (not monthly). 12. Budgeted balance sheet at June 30. ZIBGY MANUFACTURING Schedule of Cash Receipts April May June Sales $ 663,000 $ 573,000 585,000 Cash receipts from Cash sales 198,900 171,900 175,500 Collections of prior period sales 464,100 464.100 401,100 Total cash receipts $ 663,000 $ 636,000 $ 576,600 Schedule of Cash Payments for Direct Materials April May June Materials purchases $ 195,600 $ 205,000 $ 197,900 Cash payments for Current period purchases Prior period purchases Total cash payments 0 $ 0 0ZIGBY MANUFACTURING Budgeted Balance Sheet June 30 Assets Cash 90,645 Accounts receivable 409,500 Raw materials inventory 90,000 Finished goods inventory 450,840 Equipment $ 720,000 720,000 Total assets $1,760,985 Liabilities and Equity Liabilities Accounts payable $ 197,900 Long-term note payable 500,000 Taxes payable 25,259 Equity Common stock $ 345,000 Retained earnings 456.950 x Total Liabilities and Equity $ 1,525,109The management of Zigby Manufacturing prepared the following balance sheet for March 31. Z] GBY MANUFACTURING Balance Sheet March 31 Assets Liabilities and Equity Cash $ 36,666 Liabilities Accounts receivable 464,166 Accounts payable $ 266,466 Raw materials inventory 98,566 Loan payable 22,666 Finished goods inventory 456,646 Long-term note payable 566,666 $ 228,466 Equipment $ 626,666 Equity Less: Accumulated depreciation 166,666 466,666 Common stock 345,666 Retained earnings 436,646 225,646 Total assets $ 1:593:449 Total liabilities and equity $ 1359354413 To prepare a master budget for April, May, and June. management gathers the following information. a. Sales for March total 22,106 units. Budgeted sales in units follow: April, 22100; May, 19,106; June, 19,560: and July, 22.106. The product's selling price is $30.00 per unit and its total product cost is $25.50 per unit. 1:. Raw materials inventory consists solely of direct materials that cost $26 per pound. Company policy calls for a given month's ending materials inventory to equal 50% ofthe next month's direct materials requirements. The March 31 raw materials inventory is 4.925 pounds. The budgeted June 30 ending raw materials inventory is 4,500 pounds. Each finished unit requires 0.50 pound of direct materials. c. Company policy calls for a given month's ending finished goods inventory to equal 80% of the next month's budgeted unit sales. The March 31 finished goods inventory is 1?,686 units. d. Each nished unit requires 6.56 hour of direct labor at a rate of $25 per hour. a. The predetermined variable overhead rate is $3.50 per direct labor hour. Depreciation of $25,292 per month is the only fixed factory overhead item. 1. Sales commissions of '36 of sales are paid in the month ofthe sales. The sales manager's monthly salary is $4,000. 9. Monthly general and administrative expenses include $22,060 for administrative salaries and 0.9% monthly interest on the long- term note payable. h. The company budgets 30% of sales to be for cash and the remaining 76% on credit. Credit sales are collected in full in the mo nth following the sale [no credit sales are collected in the month of sale]. i. All raw materials purchases are on credit, and accounts payable are solely tied to raw materials purchases. Raw materials purchases are fully paid in the next month {none are paid in the month of purchase). j. The minimum ending cash balance for all months is $30,660. If necessary, the company borrows enough cash using a loan to reach the minimum. Loans require an interest payment of1% at each monthend (before any repayment}. lfthe monthend preliminary cash balance exceeds the minimum. the excess will be used to repay any loans