The management of Zigby Manufacturing prepared the following balance sheet for March 31. Assets Cash Accounts receivable Raw materials inventory Finished goods inventory Equipment Less: Accumulated depreciation ZIGBY MANUFACTURING Balance Sheet March 31 Liabilities and Equity $ 50,000 Liabilities 386,400 Accounts payable 84,200 Loan payable 368,000 Long-term note payable Equity 451,000 Common stock Retained earnings $ 1,339,600 Total liabilities and equity $ 196,600 12,000 500,000 $ 708,600 $ 602,000 151,000 336,000 295,000 631,000 $ 1,339,600 Total assets To prepare a master budget for April, May, and June, management gathers the following information. a. Sales for March total 23,000 units. Budgeted sales in units follow: April, 23,000; May, 15,300; June, 20,400; and July, 23,000. The product's selling price is $24.00 per unit and its total product cost is $20.00 per unit. b. 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 4,210 pounds. The budgeted June 30 ending raw materials inventory is 4,100 pounds. Each finished unit requires 0.50 pound of direct materials 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 I finished goods inventory is 18,400 units. d. Each finished unit requires 0.50 hour of direct labor at a rate of $15 per hour. e. The predetermined variable overhead rate is $2.80 per direct labor hour. Depreciation of $21,523 per month is the only fixed factory overhead item f. Sales commissions of 10% of sales are paid in the month of the sales. The sales manager's monthly salary is $3,100. g. Monthly general and administrative expenses include $13,000 for administrative salaries and 0.5% monthly interest on the long- term note payable. 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 purchases are on credit, and accounts payable are solely tied to raw materials purchases. Raw materials d. Each finished unit requires 0.50 hour of direct labor at a rate of $15 per hour. e. The predetermined variable overhead rate is $2.80 per direct labor hour. Depreciation of $21,523 per month is the only fixed factory overhead item. f. Sales commissions of 10% of sales are paid in the month of the sales. The sales manager's monthly salary is $3,100. g. Monthly general and administrative expenses include $13,000 for administrative salaries and 0.5% monthly interest on the long- term note payable. 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). 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 $50,000. 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 $11,000 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. 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. Factory 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. June May 367,200 $ $ 489,600 ZIBGY MANUFACTURING Schedule of Cash Receipts April Sales $ 552,000 Cash receipts from Cash sales 165,600 Collections of prior period sales 386,400 Total cash receipts $ 552,000 110,160 386,400 496,560 146,880 257,040 403,920 $ $ June $ 194,400 Schedule of Cash Payments for Direct Materials April May Materials purchases $ 181,100 $ 209,300 Cash payments for Current period purchases $ 0 $ 0 Prior period purchases 196,600 181,100 Total cash payments $ 196,600 181,100 $ 0 209,300 209,300 $ Cash Budget April May June Beginning cash balance $ 50,000 165,204 X $ 241,862 X Add: Cash receipts from sales 552,000 496,560 403,920 Total cash available 602,000 661,764 645,782 Less: Cash payments for: Direct labor 126,300 23,576 145,350 27,132 Variable overhead 168,600 31,472 13,000 General and administrative salaries 13.000 13.000 $ 50,000 $ 165,204 X $ 241,862 Beginning cash balance Add: Cash receipts from sales Total cash available > 552,000 496,560 403,920 602,000 661,764 645,782 Less: Cash payments for: Direct labor 126,300 23,576 168,600 31,472 Variable overhead 145,350 27,132 13,000 36,720 General and administrative salaries 13,000 13,000 Sales commissions 48,960 55,200 3,100 Sales salaries OOOOOOOOO OOOOOOOOO 3,100 oolololololololo 3,100 Loan interest 120 0 0 0 11,000 0 Dividends Purchases of equipment Long-term note interest 0 0 100,000 2,500 2,500 2,500 367,632 238,802 241,862 X 68,850 X Total cash payments Preliminary cash balance Additional loan (loan repayment) Ending cash balance 223,796 177,204 X (12,000) 165,204 X > 0 0 241,862 $ 68,850 Loan balance April May June Loan balance - Beginning of month $ 12,000 $ 0 $ 0 Additional loan (loan repayment) (12,000) 0 0 Loan balance - End of month $ 0 $ 0 $ 0 Budgeted balance sheet at June 30. (Round your final answers to the nearest whole dollar.) ZIGBY MANUFACTURING Budgeted Balance Sheet June 30 Assets Cash $ 68,850 x Accounts receivable 342,720 82,000 Raw materials inventory Finished goods inventory 368,000 0 Total assets Liabilities and Equity Liabilities Equity Total Liabilities and Equity