The management of Zigby Manufacturing prepared the following balance sheet for March 31. h. The company budgets 30% of sales to be for cash and the remaining 70% on credit Credit sales are collected in full in the month following the sale (no credit sales are collected in the month of sale). 1. All raw materials purchasys are on credi, 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) 1. The minimum ending cash balance for all months is $40,000. If necessary, the company borrows enough cash using a loan to reach the minimum. Loans require an interest payment of 1% at each month-end (before any repayment). If the month-end preliminary cash balance exceeds the minimum, the excess will be used to repay any loans. k. Dividends of $10,000 are budgeted to be declared and paid in May. 1. 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. m. Equipment purchases of $100.000 are budgeted for the last day of June. 8. Schedule of cash receipts. 9. Schedule of cash payments for direct materials. 10. Cash budget. (Negative balances and Loan repayment amounts (if any) should be indicated with minus sign.) The management of Zigby Manufacturing prepared the following balance sheet for March 31. h. The company budgets 30% of sales to be for cash and the remaining 70% on credit Credit sales are collected in full in the month following the sale (no credit sales are collected in the month of sale). 1. All raw materials purchasys are on credi, 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) 1. The minimum ending cash balance for all months is $40,000. If necessary, the company borrows enough cash using a loan to reach the minimum. Loans require an interest payment of 1% at each month-end (before any repayment). If the month-end preliminary cash balance exceeds the minimum, the excess will be used to repay any loans. k. Dividends of $10,000 are budgeted to be declared and paid in May. 1. 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. m. Equipment purchases of $100.000 are budgeted for the last day of June. 8. Schedule of cash receipts. 9. Schedule of cash payments for direct materials. 10. Cash budget. (Negative balances and Loan repayment amounts (if any) should be indicated with minus sign.)
