The management of Zigby Manufacturing prepared the following balance sheet for March 31. ZIGBY MANUFACTURING Ba lance Sheet March 31 Assets Liabilities and Equity Cash $ 136,880 Liabilities Accounts receivable 1,170,968 Accounts payable $ 683,480 Raw materials inventory 334,900 Loan payable 12,008 Finished goods inventory 1,186,836 Longterm note payable 1.7391333 $ 2,395,480 Equipment $ 2,048,800 Equity Less: Accumulated depreciation 513.330 1,538,808 Common stock 1,139,888 Retained earnings 744.295 1.333.295 Total assets $ 4:273:595 Total liabilities and equity $ 4:273:595 To prepare a master budget for April, May, and June, management gathers the following information 1'"?- . Sales for March total 69,700 units. Budgeted sales in units follow: April, 69,700; May, 66,300; June, 68,000; and July, 69,700. The product's selling price is $24.00 per unit and its total product cost is $19.85 per unit. . Raw materials inventory consists solely of direct materials that cost $20 per pound. Company policy calls for a given month's ending materials inventory to equal 50% of the next month's direct materials requirements. The March 31 raw materials inventory is 16,745 pounds. The budgeted June 30 ending raw materials inventory is 13,600 pounds. Each finished unit requires 0.50 pound of direct materials. . Company policy calls for a given month's ending finished goods inventory to equal 80% ofthe next month's budgeted unit sales. The March 31 finished goods inventory is 55,760 units. Each finished unit requires 0.50 hour of direct labor at a rate of $15 per hour. The predetermined variable overhead rate is $2.70 per direct labor hour. Depreciation of $68,000 per month is the only fixed factory overhead item. Sales commissions of 8% of sales are paid in the month of the sales. The sales manager's monthly salary is $10,200. . Monthly general and administrative expenses include $40,800 for administrative salaries and 0.9% monthly interest on the long- term note payable. . 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). . 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). . The minimum ending cash balance for all months is $136,000. 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. . Dividends of $34,000 are budgeted to be declared and paid in May. . 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. . Equipment purchases of $340,000 are budgeted for the last day ofJune. \fReq 1 Req 2 Req 3 Req 4 Req 5 Req 6 Req 7 Req B to 10 Req 11 Req 12 8. Schedule of cash receipts. 9. Schedule of cash payments for direct materials. 10. Cash budget. (Negative balances and Loan repayment am0unts (if any) should be indicated with minus sign.) Show IessA 1.672.800 $ 1,591,200 $ 1,632,000 Cash receipts from Cash sales 501,840 1,170,960 1,672,800 477,360 1,170,960 $ 1,648,320 439.300 9 1,113,340 9 s 1.303.440 Collections of prior period sales Total cash receipts Materials purchases 673.200 $ 685,100 $ 618.800 Cash payments for Current period purchases '69 '68 D as D as D Prior period purchases 333.4009 373,200 335.1009 Total cash payments $ 683.400 $ 673,200 $ 685.100 Beginning cash balance :5 133.0009 $ 320.3339 55 43.9.1139 Add: Cash receipts from sales 9 1.372.3009 1.343.3209 1,303,440 9 Total cash available 1.303.300 1.333.703 2.072.553 Less: Cash payments for: Direct material Direct labor Variable overhead 333.4009 502.3509 90.4239 133.3249 373.2009 507.4509 91.3419 127.2939 335.100 9 520.200 9 33.333 9 Sales commissions 130.560 6 Sales salaries General and administrative salaries Dividends Loan interest 40.3009 34.0009 40.3009 40.300 9 Long-term note interest Purchases of equipment 340,000 a Total cash payments 1,476,417 1,499,587 1,835,796 Preliminary cash balance 332.3339 439,1139 233.730 9 Additional loan (loan repayment) 9 (12.000)9 Ending cash balance _$ 439,113 $ 233.730 Loan balance - Beginning of month $ 12.0009 \" Additional loan (loan repayment) (12.000)9