The management of Zigby Manufacturing prepared the following estimated balance sheet for March 2019: ZIGBY MANUFACTURING Estimated Balance Sheet March 31, 2019 Assets Cash Accounts receivable Raw materials inventory Finished goods inventory Total current assets Equipment Accumulated depreciation Equipment, net Total assets Liabilities and Equity Accounts payable Short-term notes payable Total current liabilities Long-term note payable Total liabilities Common stock Retained earnings Total stockholders' equity Total liabilities and equity $ 40,000 342, 248 98,500 325,540 806, 288 600,000 (150,000) 450,000 $1,256,288 $ 200,500 12,000 212,500 500,000 712,500 335,000 208,788 543, 788 $1,256,288 To prepare a master budget for April, May, and June of 2019, management gathers the following information. a. Sales for March total 20,500 units. Forecasted sales in units are as follows: April, 20,500; May, 19,500; June, 20,000; and July, 20,500. Sales of 240,000 units are forecasted for the entire year. The product's selling price is $23.85 per unit and its total product cost is $19.85 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 4,925 units, which complies with the policy. The expected June 30 ending raw materials inventory is 4,000 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 16,400 units, which complies with the policy. d. Each finished unit requires 0.50 hours of direct labor at a rate of $15 per hour. e. Overhead is allocated based on direct labor hours. The predetermined variable overhead rate is $2.70 per direct labor hour. Depreciation of $20,000 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 $3,000. g. Monthly general and administrative expenses include $12,000 administrative salaries and 0.9% 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 materials purchases are fully paid in the next month. j. The minimum ending cash balance for all months is $40,000. 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 $10,000 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 35% in the quarter and paid in the third calendar quarter. m. Equipment purchases of $130,000 are budgeted for the last day of June. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Required 6 Required 7 Required 8 Required 9 Required 10 Raw materials budget. (Round per unit values to 2 decimal places.) ZIGBY MANUFACTURING Raw Materials Budget April, May, and June 2019 April May June Total Production budget (units) 19,700 19,900 20,400 Materials requirements per unit 0.50 0.50 0.50 Materials needed for production 9,850 9,950 10,200 4,975 5,100 4,000 Budgeted ending inventory Total materials requirements (units) 14,825 15,050 14,200 4,925 4,975 5,100 9,900 10,075 9,100 29,075 Beginning inventory Materials to be purchased Material price per unit Budgeted raw material purchases $ 20 $ 20 $ 20 $ 198,000 $ 201,500 $ 182,000 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Required 6 Required 7 Required 8 Required 9 Required 10 Budgeted income statement for the entire second quarter (not for each month separately). (Round your final answers to the nearest whole dollar.) ZIGBY MANUFACTURING Budgeted Income Statement For Three Months Ended June 30, 2019 Sales Cost of goods sold Gross profit $ 1,431,000 1,191,000 240,000 Operating expenses Sales commissions $ 114,480 9,000 Sales salaries General administrative salaries 36,000 Bank loan interest expense 120 Long-term note interest 13,500 Total operating expenses Income before taxes 173,100 66,900 23,415 Iincome tax Net income $ 43,485 ZIGBY MANUFACTURING Cash Budget April, May, and June 2019 April May June $ 40,000 $ 83,347 $ 124,296 Beginning cash balance Cash receipts from customers Total cash available 488,926 468,653 481,770 565, 117 528,926 592,949 Cash payments for: Raw materials Direct labor Variable overhead General & administrative salaries 200,500 147,750 26,595 12,000 39,114 3,000 120 198,000 149,250 26,865 12,000 37,206 3,000 201,500 153,000 27,540 12,000 38,160 3,000 Sales commissions Sales salaries Loan interest Dividends 10,000 Purchases of equipment 130,000 4,500 Long-term note interest 4,500 4,500 Total cash payments 433,579 440,821 569,700 95,347 124,296 23,248 Preliminary cash balance Additional loan (loan repayment) Ending cash balance 16,752 (12,000) 83,347 $ $ 124,296 $ 40,000 Loan balance April May June Loan balance - Beginning of month $ 12,000 $ 0 $ 0 Additional loan (loan repayment) (12,000) 16,752 Loan balance - End of month $ 0 $ 0 $ 16,752