The management of Zigby Manufacturing prepared the following estimated balance sheet for March 2017: ZIGBY MANUFACTURING Estimated Balance Sheet March 31, 2017 Assets Cash $ 50,000 Accounts receivable 434,240 Raw materials inventory 84,210 Finished goods inventory 368,000 Total current assets 936,450 Equipment, gross 602,000 Accumulated depreciation (151,000 ) Equipment, net 451,000 Total assets $ 1,387,450 Liabilities and Equity Accounts payable $ 196,610 Short-term notes payable 12,000 Total current liabilities 208,610 Long-term note payable 505,000 Total liabilities 713,610 Common stock 336,000 Retained earnings 337,840 Total stockholders equity 673,840 Total liabilities and equity $ 1,387,450 To prepare a master budget for April, May, and June of 2017, management gathers the following information: Sales for March total 23,000 units. Forecasted sales in units are as follows: April, 23,000; May, 15,300; June, 20,400; and July, 23,000. Sales of 241,000 units are forecasted for the entire year. The products selling price is $23.60 per unit and its total product cost is $20.00 per unit. Company policy calls for a given months ending raw materials inventory to equal 50% of the next months materials requirements. The March 31 raw materials inventory is 4,210 units, which complies with the policy. The expected June 30 ending raw materials inventory is 4,100 units. Raw materials cost $20 per unit. Each finished unit requires 0.50 units of raw materials. Company policy calls for a given months ending finished goods inventory to equal 80% of the next months expected unit sales. The March 31 finished goods inventory is 18,400 units, which complies with the policy. Each finished unit requires 0.50 hours of direct labor at a rate of $15 per hour. Overhead is allocated based on direct labor hours. The predetermined variable overhead rate is $2.80 per direct labor hour. Depreciation of $21,520 per month is treated as fixed factory overhead. Sales representatives commissions are 10% of sales and are paid in the month of the sales. The sales managers monthly salary is $3,100. Monthly general and administrative expenses include $13,000 administrative salaries and 0.5% monthly interest on the long-term note payable. The company expects 20% of sales to be for cash and the remaining 80% on credit. Receivables are collected in full in the month following the sale (none are collected in the month of the sale). All raw materials purchases are on credit, and no payables arise from any other transactions. One months raw materials purchases are fully paid in the next month. The minimum ending cash balance for all months is $41,000. If necessary, the company borrows enough cash using a short-term note to reach the minimum. Short-term notes require an interest payment of 1% at each month-end (before any repayment). If the ending cash balance exceeds the minimum, the excess will be applied to repaying the short-term notes payable balance. Dividends of $11,000 are to be declared and paid in May. No cash payments for income taxes are to be made during the second calendar quarter. Income tax will be assessed at 40% in the quarter and paid in the third calendar quarter. Equipment purchases of $131,000 are budgeted for the last day of June.

ZIGBY MANUFACTURING General and Administrative Expense Budgets April, May, and June 2017 April May June Total budgeted G&A expenses Cach budget. (Negative balances and Laan repayment amounts (t any) should be no ed Caulation of Cash receipts from customer Aprti May cach reoelpts from ourtomene Cument month's cash ss Cach Budost April May, and June 2017 Apri Css payments for Totel cash payments Prelminery cesh belence Ending cesh be ence Aprl can-igman Lcen balace-End of montn ZIGBY MANUFACTURING Budgeted Income Statement For Three Months Ended June 30, 2017 Operating expenses Total operating expenses Budgeted Balance Sheet June 30, 2017 Assets Total current assets Equipment, net Total assets Liabilities and Equity Liabilities Total current liabilities Stockholders' Equity Total Stockholders' Equity Total Liabilities and Equity