Problem 20-4A Manufacturing: Preparation of a complete master budget LO P1, P2, The management of Zigby Manufacturing prepared the following estimated balance sheet for March 2017 ZIGBY MANUFACTURING Estimated Balance Sheet March 31, 2017 Assets Cash 40,000 Accounts receivable 342,243 Raw materials inventory 98,500 Finished goods inventory 325, 540 Total current assets 306,280 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 288 288 Total stockholders' equity 543, 788 Total liabilities and equity $ 1,256,288 To prepare a master budget for April, May, and June of 2017, management gathers the following information: a. Sales for March total 20,500 units. Forecasted sales in units are as follows: April, 20,500; May, 19.500, June, 20.000, and July. 20,500 Sales of 240,000 units are forecasted for the entire year. The product's selling price is $23.85 per unit and its total product cost is $19.85 per unit. b. Company policy calls for a given month's ending raw materials inventory to equal 50% of the next month's materials requirements The March 31 raw materials inventory is 4.925 units, which complies with the policy. The expected June 30 ending raw materials inventory is 4,000 units. Raw materials cost $20 per unit. Each finished unit requires 0.50 units of raw materials. c. Company policy calls for a given month's ending finished goods inventory to equal 80% of the next month's expected unit sales The March 31 finished goods inventory is 16,400 units, which complies with the policy d. Each finished unit requires 0.50 hours of direct laborat a rate of $15 per hour e. Overhead is allocated based on direct labor hours. The predetermined variable overhead rate is $2.70 per direct labot hour Depreciation of $20,000 per month is treated as fixed factory overhead f. Sales representatives' commissions are 8% of sales and are paid in the month of the sales. The sales manager's monthly salary is $3,000 g. Monthly general and administrative expenses include $12,000 administrative salaries and 0.9% monthly interest on the long-term note payable. h. 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). 1. All raw materials purchases are on credit, and no payables arise from any other transactions. One month's raw materials purchases are fully paid in the next month. J. The minimum ending cash balance for all months is $40,000. If necessary, the company borrows enough cash using a short-term Required 1 Required 2 Required Required Required 5 Requiredo Required Required Required Required 10 Budgeted income statement for the entire second quarter (not for each month separately). (Round your final answers to the nearest whole dollar) ZIGDY MANUFACTURING Budgeted Income Statement For Three Months Ended June 30, 2017 * Operating expenses 0 Total operating expenses 0 Total operating expenses 0 0 $ 0 7 Required 1 Required 2 Required 3 Required 4 Required S Required 6 Required 7 Required a Required 9 Required 10 Budgeted balance sheet. (Round your final answers to the nearest whole dollar.) 5 oints ZIGHY MANUFACTURING Budgeted Balance Sheet June 30, 2017 eBook Assets Print References M Total current assets 0 Equipment, net Total assets Liabilities and Equity Liabilities 7. 3 Meet Equipment, net 0 Total assets Liabilities and Equity Liabilities Fook int ences Total current liabilities Stockholders' Equity Total Stockholders' Equity Total Liabilities and Equity