Please answer only #1-#5 and use the spreadsheet which I attached here. First file is questions and second one is spreadsheet. Also, hope you show all calculations and be specific!

ACCOUNTING 203 ON-LINE EXAM #3 (CH.8) 75 PTS. DUE DATE: Thursday, March 3 (by 11:59 P.M.) The Grilton Tire Company manufactures racing tires for bicycles. Grilton sells tires for $50 each. Grilton is planning for next year by developing a master budget by quarters. Grilton's balance sheet for December 31, 2016 follows: GRILTON TIRE COMPANY Balance Sheet December 31, 2016 Assets Current Assets: Cash Accounts Receivable Raw Materials Inventory Finished Goods Inventory Total Current Assets Property, Plant and Equipment: Equipment Less: Accumulated Depreciation Total Assets $ 39,000 40,000 2,400 8,700 $ 90,100 177,000 (42,000) 135,000 $225,100 Liabilities Current Liabilities: Accounts Payable $ 8,000 Stockholder's Equity Common Stock, no par Retained Earnings Total Stockholder's Equity Total Liabilities and Stockholder's Equity $ 130,000 87,100 217,100 $225,100 Other data for Grilton Tire Company: a. Budgeted Sales are 1,500 for the first quarter and expected to increase by 200 tires per quarter. Cash Sales are expected to be 30% of total sales, with the remaining 70% of sales on account. b. Finished Goods Inventory on December 31, 2016 consists of 300 tires at $29 each. c. Desired ending Finished Goods Inventory is 40% of the next quarter's sales; first quarter sales for 2018 are expected to be 2,300 tires and second quarter sales for 2018 are expected to be 2,500. FIFO inventory costing method is used. d. Direct Materials cost is $8 per tire. e. Desired ending Raw Materials Inventory is 30% of the next quarter's direct materials needed for production. f. Each tire requires 0.40 hours of direct labor; direct labor costs average $16 per hour. g. Variable manufacturing overhead is $2 per tire produced. h. Fixed manufacturing overhead includes $4,500 per quarter in depreciation and $26,780 per quarter for other costs, such as utilities, insurance, and property taxes. i. Fixed selling and administrative expenses include $8,000 per quarter for salaries; $1,800 per quarter for rent; $1,200 per quarter for insurance; and $500 per quarter for depreciation. j. Variable selling and administrative expenses include supplies at 2% of sales. k. Capital expenditures include $45,000 for new manufacturing equipment, to be purchased and paid in the first quarter. l. Cash receipts for sales on account are 60% in the quarter of sale and 40% in the quarter following the sale; December 31, 2016, Accounts Receivable is received in the first quarter of 2017. m. Direct materials purchases are paid 70% in the quarter purchased and 30% in the following quarter; December 31, 2016, Accounts Payable is paid in the first quarter of 2017. n. Direct labor, manufacturing overhead, and selling and administrative costs are paid in the quarter incurred. o. Income tax expense is projected at $3,500 per quarter and is paid in the quarter incurred. p. Grilton desires to maintain a minimum cash balance of $35,000 and borrows from the local bank as needed in increments of $1,000 at the beginning of the quarter; principal repayments are made at the beginning of the quarter when excess funds are available and in increments of $1,000; interest is 6% per year and paid at the beginning of the quarter based on the amount outstanding from the previous quarter. REQUIREMENTS: 1. Prepare a sales budget in units and dollars for each quarter and in total for the year 2017. (5 pts.) 2. Prepare a schedule of expected cash collections for each quarter and in total for the year 2017. (5 pts.) 3. Prepare a production budget for each quarter and in total for the year 2017. (5 pts.) 4. Prepare a direct materials budget for each quarter and in total for the year 2017. (5 pts.) 5. Prepare a schedule of expected cash disbursements for purchases of materials for each quarter and in total of the year 2017. (5 pts.) GRILTON TIRE COMPANY SALES BUDGET 1 2 3 4 Year 1 2 1 2 Sales in units x Selling price Total Sales SCHEDULE OF EXPECTED CASH COLLECTIONS 1 2 4 Year 4 3 Year 4th Quarter 2016 1st Quarter 2017 2nd Quarter 2017 3rd Quarter 2017 4th Quarter 2017 Totals PRODUCTION BUDGET 1 Sales in units 2 3 1500 1700 1900 2100 7200 2300 680 760 840 920 920 1000 2180 2460 2740 8120 8120 3300 300 680 760 300 300 920 1880 1780 1980 7820 7820 2380 Add desired units of ending Fin. Goods Inv. Total needs Less: units of beg. Fin. Goods Inv. Required production in units DIRECT MATERIALS BUDGET 1 Required production in units x $8.00 per unit Total cost of production needs Add: Desired cost of ending raw material Inventory Total cost of raw materials needed Less: cost of beginning raw materials inventory Cost of raw materials to be purchsed 2 3 4 Year 1880 1780 1980 2180 7820 8 8 8 8 8 15040 14240 15840 17440 62560 534 594 654 714 714 15574 14834 16494 18154 63274 300 534 594 654 300 16912 14720 16320 17920 65872 1 SCHEDULE OF EXPECTED CASH DISBURSEMENTS FOR PURCHASES OF MATERIALS 1 A/P, Dec. 31, 2016 1st Quarter 2017 2nd Quarter 2017 3rd Quarter 2017 4th Quarter 2017 Totals 2 3 4 Year DIRECT LABOR BUDGET 1 2 3 4 Year Total production units x Direct labor hours per unit Total direct labor hours x Direct labor cost per hour Total direct labor cost MANUFACTURING OVERHEAD BUDGET 1 2 3 4 Year Variable Overhead Costs: Units of production x Variable Overhead Rate Total Variable Overhead Fixed Overhead Costs: Depreciation Other Total Fixed OH costs Total Manu. OH costs Less Depreciation Manufacturing Overhead paid in cash COST OF GOODS MANUFACTURED BUDGET Direct Materials Used: Dir.Mat. Inv. 1/1/2017 Purchases during 2017 Materials Available Less: Dir. Mat. Inv 12/31/2017 Cost of Direct Mat. Used Direct Labor Costs Manufacturing OH costs Total Manufacuting costs Add: Beg. WIP 1/1/2017 Subtotal Less: End WIP 12/31/2017 Cost of Goods Manufactured INCOME STATEMENT For the Year ended December 31, 2017 Sales Cost of Goods Sold: Fin. Goods Inv. Dec. 31,2016* Cost of Goods Manufactured Goods available for sale Less. Fin. Goods Inv. 12/31/2017** Cost of Goods Sold Gross Margin Selling and Admin. Expenses Income from Operations Interest Expense Income before Income taxes Income Tax Expense Net Income **Cost of Goods Manufactured/ Total units produced = Unit cost for units produced in 2017 *See Balance Sheet on 12/31/2016 CASH BUDGET For the Year end December 31, 2017 1 Beginning Cash Balance Add Cash Receipts: Collections from customers Total cash available Cash Payments: Direct Materials Direct Labor Manufacturing Overhead Selling and Administrative: Fixed Variable Capital Expenditures Income Taxes Total cash disbursements Excess (deficiency) of cash available over disbursements Cash balance before financing Financing Section: Borrowings (at the beginnings of quarters) Repayments (at the beginnings of quarters) Interest Ending Cash balance 2 3 4 Year