The management of Zigby Manufacturing prepared the following estimated balance sheet for March 2017: ZIGBY MANUFACTURING Estimated Balance Sheet March 31, 2017 Assets Cash $ 42,000 Accounts receivable 364,000 Raw materials inventory 107,200 Finished goods inventory 349,440 Total current assets 862,640 Equipment, gross 604,000 Accumulated depreciation (152,000) Equipment, net 452,000 Total assets $1,314,640 Liabilities and Equity Accounts payable $ 211,300 Short-term notes payable 14,000 Total current liabilities 225,300 Long-term note payable 510,000 Total liabilities 735,300 Common stock 337,000 Retained earnings 242,340 Total stockholders' equity 579,340 Total liabilities and $1,314,640 equity To prepare a master budget for April, May, and June of 2017, management gathers the following information: a. Sales for March total 20,800 units. Forecasted sales in units are as follows: April, 20,800; May, 21,600: June, 20,900, and July, 20,800. Sales of 242.000 units are forecasted for the entire year. The product's selling price is $25.00 per unit and its to product cost is $21.00 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 5,360 units, which complies with the policy. The expected June 30 ending raw materials inventory is 4,200 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 16,640 units, which complies with the policy. d. Each finished unit requires 0.50 hours of direct labor at a rate of $17 per hour. e. Overhead is allocated based on direct labor hours. The predetermined variable overhead rate is $3.00 per direct labor hour. Depreciation of $21500 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 $3,200. g. Monthly general and administrative expenses include $14,000 administrative salaries and 0.7% 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). i. All raw materials purchases are on credit and no payables arise from any other transactions. One month's raw materiais purchases are fully paid in the next month. J. The minimum ending cash balance for all months is $42,000. 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. k. Dividends of $12.000 are to be declared and paid in May. 1. 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. m. Equipment purchases of $132.000 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 Complete this question by entering your answers in the tabs below. Required Requir... Requir.. Requir... Requir... Requir... Requir... Requir... Requir... Requir... 2 3 4 5 6 7 8 9 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 $ 520,000 $540,000 $ 522,500 Cash sales 30% 156,000 162,000 156,750 Sales on credit 70% $ 364,000 $ 378,000 $365,750 Total cash receipts from customers April May June Current month's cash sales $ 156,000 $ 162,000 $ 156,750 Collections of receivables 384,000 364,000 378,000 Total cash receipts $ 520,000 $ 526.000 $ 534,750 ZIGBY MANUFACTURING Cash Budget April, May, and June 2017 April May June Beginning cash balance $ 42,000 $ 42,000 $ 42,000 Cash receipts from customers 520,000 526,000 534,750 Total cash available 562,000 568,000 576.750 Cash payments for: Purchases of equipment 132.000 Dividends 12,000 General & administrative salaries 14,000 14,000 14,000 Loon interest 3,670 3,570 3,570 Sales salaries 3,200 3,200 3,200 Sales commissions 41,000 43.200 41,800 Additional loan (loan repayment) 211,300 212,400 200,300 Direct labor 182,240 178,840 176,970 Variable overhead 32. 160 31,660 31,230 Taxes paid 63,260 52,660 62,330 Total cash payments Complete this question by entering your answers in the tabs below. Required Requir... Requir... Requir. Requir... Requir... Requir... Requir... Requir... Requir... 1 2 3 4 5 6 7 8 9 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 Jung Total budgeted sales $ 520,000 $540,000 $ 522,500 Cash sales 30% 156,000 162,000 156,750 Sales on credit 70% $ 364,000 $ 378,000 $365,750 Total cash receipts from customers April May June Current month's cash sales $ 156,000 162,000 $ 156,750 Collections of receivables 364,000 364,000 378,000 Total cash receipts $ 520,000 $ 526,000 $ 534,750 ZIGBY MANUFACTURING Cash Budget April, May, and June 2017 April May June Beginning cash balance $ 42,000 $ 42,000 $ 42,000 Cash receipts from 520,000 526,000 534,750 customers Total cash available 562,000 568,000 576,750 Cash payments for Purchases of equipment 132,000 Dividends 12,000 General & administrative 14,000 salaries 14,000 14,000 Loan Interest 3,570 3,570 3,570 Sales salaries 3,200 3,200 3,200 Sales commissions 41,600 43,200 41,800 Additional loan (loan 211,300 212,400 209,300 repayment) Direct labor 182,240 178,840 176,970 Variable overhead 32,160 31,560 31,230 Taxes paid 53,260 52,660 52,330 Total cash payments Preliminary cash balance Additional loan (loan repayment) Ending cash balance 541,330 551,430 664,400 20,670 16,670 87,650 21,330 25,330 129,650 $ 42,000 $ 42,000 $ 217,300 Loan balance April Loan balance - Beginning of month Additional loan (loan repayment) Loon balance - End of month $ May June $ 0 $ 25,330 25,330 129,650 0 $ 25,330 $ 154.980