The management of Zigby Manufacturing prepared the following estimated balance sheet for March 2019. ZIGBY MANUFACTURING Estimated Balance Sheet March 31, 2019 Assets Cash $ 80,000 Accounts receivable 364,000 Raw materials inventory 96,000 Finished goods inventory 364,800 Total current assets 904,800 Equipment 610,000 Accumulated depreciation (155,000 ) Equipment, net 455,000 Total assets $ 1,359,800 Liabilities and Equity Accounts payable $ 195,500 Short-term notes payable 17,000 Total current liabilities 212,500 Long-term note payable 510,000 Total liabilities 722,500 Common stock 340,000 Retained earnings 297,300 Total stockholders equity 637,300 Total liabilities and equity $ 1,359,800 To prepare a master budget for April, May, and June of 2019, management gathers the following information. Sales for March total 20,000 units. Forecasted sales in units are as follows: April, 20,000; May, 19,000; June, 19,500; and July, 20,000. Sales of 245,000 units are forecasted for the entire year. The products selling price is $26.00 per unit and its total product cost is $22.80 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 4,800 units, which complies with the policy. The expected June 30 ending raw materials inventory is 4,500 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 16,000 units, which complies with the policy. Each finished unit requires 0.50 hours of direct labor at a rate of $20 per hour. Overhead is allocated based on direct labor hours. The predetermined variable overhead rate is $3.20 per direct labor hour. Depreciation of $23,400 per month is treated as fixed factory overhead. Sales representatives commissions are 6% of sales and are paid in the month of the sales. The sales managers monthly salary is $3,500. Monthly general and administrative expenses include $17,000 administrative salaries and 0.9% monthly interest on the long-term note payable. 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). 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 $45,000. 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 $15,000 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 35% in the quarter and paid in the third calendar quarter. Equipment purchases of $135,000 are budgeted for the last day of June. Required: Prepare the following budgets and other financial information as required. All budgets and other financial information should be prepared for the second calendar quarter, except as otherwise noted below. (Round calculations up to the nearest whole dollar, except for the amount of cash sales, which should be rounded down to the nearest whole dollar.): 1. Sales budget. 2. Production budget. 3. Raw materials budget. 4. Direct labor budget. 5. Factory overhead budget. 6. Selling expense budget. 7. General and administrative expense budget. 8. Cash budget. 9. Budgeted income statement for the entire second quarter (not for each month separately). 10. Budgeted balance sheet.

Sections 1-5 have been completed (see attached)

1) ZIGBY MANUFACTURING Sales Budget For the Months April May and June, 2019 Budgeted Budgeted Budgeted Unit Sales Sales Unit Price Dollars April 20,000 $26.00 $520,000 120000 units X $260 - $520000 May 19,000 $26.00 S494,000 (19000 units x 5260 - 5494000) June 19,500 $26.00 $507,000 (19500 units x 5260 - SS07000) Quarter 58,500 $26.00 $1,521,000 158500 units x 5260 - $1521000) Quarter 2) ZIGBY MANUFACTURING Production Budget For the Months April May and June, 2019 April May Next month's budgeted sales 19,000 19,500 Ratio of inventory of future sales 80% 80% Budgeted Unit Sales 20,000 19,000 Add: Desired ending finished goods 15.200 15,600 Required units available for sale 35,200 34,600 Less: Beginning finished goods inventory -16,000 -15,200 Units to be produced 19,200 19,400 June 20,000 80% 19,500 16,000 35,500 -15,600 19,900 58,500 Ref: Part-1] 16,000 April-19000 x 80%; May-19500 x 80%: June-20000 x 80% 74,500 -16,000 April - Given; May-19000 x 809; June-19500 x 80%] 58,500 3) ZIGBY MANUFACTURING Raw Materials Purchase Budget For the Months April May and June, 2019 April May June Budgeted production (units) 19,200 19,400 19,900 Materials required per unit 0.50 0.50 0.50 Materials needed in production 9,600 9,700 9,950 Add: Desired ending inventory 4,850 4.975 4,500 Total materials requirement 14,450 14,675 14,450 Deduct: Beginning inwentory 4,800 4,850 -4,975 Materials to be purchased 9,650 9,825 9,475 Material price per unit $20 $20 $20 Budgeted raw material purchase $193,000 $196,500 $189,500 Quarter 58,500 --> ) (As calculated in Part-2] 0.50 -> (v) 29,250 --> ) ( 4,500 April-9700 x 50%, May-9950 x 50%; June-Given] 33,750 -4,800 (April-Given; May-9700 x 50%; June-9950 x 50%] 28,950 --> $20 --> (d) $579,000 (c) x (d) 4) ZIGBY MANUFACTURING Direct Labor Budget For the Months April May and June, 2019 April May June Budgeted production (units) 19,200 19,400 19,900 Direct labor hours per unit 0.50 0.50 0.50 Total labor hours needed 9,600 9,700 9.950 Labor rate per hour $20 $20 $20 Budgeted direct labor cost $192,000 $194,000 $199,000 Quarter 58,500 > () As calculated in Part-2] 0.50 -> 29,250)-(u)(w) $20 (3) $585,000-> (y) x (2) Required 1 Required 2 Required 3 Required 4 Required 5 Required 6 Required 7 Required 8 Required 9 Required 10 Factory overhead budget. (Round per unit values to 2 decimal places.) ZIGBY MANUFACTURING Factory Overhead Budget April, May, and June 2019 April May June Total Labor hours needed Budgeted variable overhead Budgeted fixed overhead Budgeted total overhead Required 1 Required 2 Required 3 Required 4 Required 5 Required 6 Required 7 Required 8 Required 9 Required 10 Selling expense budget. ZIGBY MANUFACTURING Selling Expense Budget April, May, and June 2019 April May June Budgeted sales Sales commissions Required 1 Required 2 Required 3 Required 4 Required 5 Required 6 Required 7 Required 8 Required 9 Required 10 General and administrative expense budget. ZIGBY MANUFACTURING General and Administrative Expense Budget April, May, and June 2019 April May June Total budgeted G&A expenses Required 1 Required 2 Required 3 Required 4 Required 5 Required 6 Required 7 Required 8 Required 9 Required 10 Cash budget. (Negative balances and Loan repayment amounts (if any) should be indicated with minus sign.) Calculation of Cash receipts from customers: : April May June Total budgeted sales Cash sales Sales on credit 30% 70% Total cash receipts from customers April May June Current month's cash sales Collections of receivables Total cash receipts Cash Budget April, May, and June 2019 April May June Beginning cash balance Total cash available Cash payments for: 0 0 0 Total cash payments Preliminary cash balance o 0 0 Total cash payments Preliminary cash balance Ending cash balance Loan balance April May June Loan balance - Beginning of month Additional loan (loan repayment) Loan balance - End of month ZIGBY MANUFACTURING Budgeted Income Statement For Three Months Ended June 30, 2019 Operating expenses Total operating expenses 0 0 $ 0 ZIGBY MANUFACTURING Budgeted Balance Sheet June 30, 2019 Assets Total current assets $ 0 Equipment, net 0 Total assets Liabilities and Equity Liabilities Total current liabilities Stockholders' Equity 09 Total Stockholders' Equity Total Liabilities and Equity U