This a four part question.

ABC Company manufactures a single product and is in the process of creating a master budget for 2020. The 2019 year-end balance sheet information can be found on the "12-31-19 BALANCE SHEET" tab. The management team developed a set of assumptions that can be used to help create the 2020 budget. Assumptions can be found on the "ASSUMPTIONS" tab. (Use formulas to prepare the budget and do not round intermediate calculations.

B4 A ABC Company Budgeted Income Statement For the Year Ended December 31, 2020 AW N- 5 Sales 6 Cost of goods sold 7 Gross margin 8 Selling and administrative expenses 9 Operating income 10 Interest expense 11 Net income ABC Company Budgeted Balance Sheet December 31, 2020 17 Assets Cash Accounts Receivable Raw Materials Inventory 21 Finished Goods Inventory Equipment Accumulated Depreciation 24 Total Assets 23 26 Liabilities & Stockholders' Equity: 27. Accounts Payable 12-31-19 BALANCE SHEET ASSUMPTIONS Type here to search D A 28 Common Stock Retained Earnings 30 Total Liabilities & Stockholders' Equity REQUIREMENTS 12-31-19 BALANCE SHEET ASSUMPTIONS MASTER o Type here to search o e ABC Company Balance Sheet December 31, 2019 Assets Cash Accounts Receivable Raw Materials Inventory (5000 pounds) Finished Goods Inventory (2500 units) Equipment Accumulated Depreciation 2 Total Assets 56,400 250,000 15,000 47,250 850,000 (212,500) 1,006,150 $ 4 Liabilities & Stockholders' Equity: 15 Accounts Payable 16 Common Stock 17 Retained Earnings 18 Total Liabilities & Stockholders' Equity 19 165,000 402.000 439,150 1,006,150 $ 20 21 til Se 24 25 26 27 REQUIREMENTS | 12-31-19 BALANCE SHEET ASSUMPTIONS Type here to search O i C D E F ABC Company e Assumptions 4 Sales: 5 Estimated Unit Sales: 2020 Q2 40,000 Q4 Q1 15,000 Q2 2021 Q11 12,000 38,000 Q3 18,000 24,000 7 Selling Price per Unit 30.00 9 Expected Cash Collections: 10 All Sales are on Account 11 Collections in Quarter of Sale 12 Collections in Quarter Following Sale 70% 30% 13 14 Production Budget: 15 Desired Ending Inventory 15% of following quarter's budgeted sales (units) 16 17 Direct Materials Budget: 18 Raw materials required to produce one unit Desired raw materials on hand 20 Raw material costs 3 pounds 10% of following month's production needs 3.00 per pound 27 75% 25% 22 Expected Cash Payments 23. Payments in the Month of Purchase 24Payments in the Month Following Purchase 25 26 Direct Labor Budget: 27 Direct Labor Required per Unit REQUIREMENTS M12-31-19 BALANCE SHEET 0.25 hours ASSUMPTIONS MASTER BUDGET FINANCIALS o Type here to search Oi e A 20.00 28 Hourly Pay Rate 29 30 Manufacturing OH Budget: 31 Variable Manufacturing OH Rate 32 Fixed Manufacturing OH 33 Depreciation 34 35 Selling & Administrative Expense Budget 36 Variable S&A Expense Rate 37 Fixed S&A Expenses 38 Depreciation 3.00 per DLH $ 99,911.25 per quarter $ 10,000 per quarter A A 1.00 per unit sold 85,000 per quarter 5,000 per quarter A A $ 30,000 50,000 40 Cash Budget: 41 Minimum cash balance Cash dividend each quarter Line of Credit: Quarterly Interest Rate Maximum Balance Borrowings occur on the first day of the quarter. Repayments occur on the last day of the quarter. 44 2.5% 150,000 45 $ 46 47 48 49 50 51 D90 X TH ABC Company Master Budget AWN 4 SALES BUDGET Q1 Q2 03 Q4 TOTAL 6 Units Sales 7 Selling Price per Unit 8 Total Budgeted Sales 11 EXPECTED CASH COLLECTIONS 01 Q2 03 Q3 Q4 TOTAL 13 Accounts Receivable, Beg. Bal. 14 Q1 Sales 15 Q2 Sales 16 Q3 Sales 17 Q4 Sales 18 Total Cash Collections 20 PRODUCTION BUDGET 01 Q2 WATQ3HWIMMBAININE Q4 W IN TOTAL Q1 Q2 22 Budgeted Unit Sales 23 Add: Desired Ending Inventory 24 Total Needs 25 Less: Beginning Inventory 26 Required Production REQUIREMENTS 12-31-19 BALANCE SHEET ASSUMPTIONS MASTER BUDGET FINANCIALS Type here to search o e NO F G Q1 Q2 Q3 Q4 TOTAL 1 28 DIRECT MATERIALS BUDGET 29 30 Required production (units) 31 Materials per unit (pounds) 32 Production needs (pounds) 33 Add: Desired Ending Inventory 34 Total needed (pounds) 35 Less: Beginning inventory 36 Raw materials to be purchased 37 Cost of raw materials per pound 38 Cost of raw materials to be purchased 39 40 EXPECTED CASH PAYMENTS 41 02 Q3 04 TOTAL 42 Accounts Payable, Beg. Bal. 43 Q1 Purchases 44 Q2 Purchases 45 Q3 Purchases 46 Q4 Purchases 47 Total cash disbursements 48 49 DIRECT LABOR BUDGET Q3 Q4 TOTAL 51 Required Production 52 Direct Labor time per unit 53 Labor hours required 54 Hourly wage rate REQUIREMENTS 12-31-19 BALANCE SHEET ASSUMPTIONS MASTER BUDGET FINANCIALS O Type here to search File Home Insert Page Layout Formulas Data Review View Help Tell me what you want to do D81 X for DELF 55 Total Direct Labor Costs 57 MANUFACTURING OVERHEAD BUDGET Q1 Q2 Q3 Q4 TOTAL 59 Budgeted Direct Labor Hours 60 Variable Mfg. OH Rate 61 Variable Mfg, OH Costs 62 Fixed Mfg. OH Costs 63 Total Mfg. OH Costs 64 Less: Noncash Costs 65 Cash Disbursement for Mfg. OH 67 SELLING AND ADMINISTRATIVE EXPENSE BUDGET Q1 Q2 Q3 Q4 TOTAL 69 Budgeted Unit Sales 70 Variable S&A Rate 71 Variable Expenses 72 Fixed S&A Expenses 73 Total S&A Expenses 74 Less: Noncash Expenses 75 Cash S&A Expenses 77 CASH BUDGET Q1 02 Q3 Q4 TOTAL 79 Beginning Cash Balance 80 Add: Cash Collections 81 Total Cash Available REQUIREMENTS 12-31-19 BALANCE SHEET ASSUMPTIONS MASTER BUDGET FINANCIALS Type here to search hp Case Study - Spring Protected View] - Excel (Unlicensed Product File Home Insert Page Layout Formulas Data Review View Helis Tell what you want to do D108 I c E E 82 Less: Cash Disbursements Materials Direct Labor Manufacturing Overhead Selling and Administrative Dividends 88 Total Disbursements 89 Excess (Deficiency) 90 Financing Borrowing Repayment 93 Interest 94 Total Financing 95 Ending Cash Balance REQUIREMENTS 12-31-19 BALANCE SHEET ASSUMPTIONS MASTER BUDGET FINANCIALS O Type here to search o e o B4 A ABC Company Budgeted Income Statement For the Year Ended December 31, 2020 AW N- 5 Sales 6 Cost of goods sold 7 Gross margin 8 Selling and administrative expenses 9 Operating income 10 Interest expense 11 Net income ABC Company Budgeted Balance Sheet December 31, 2020 17 Assets Cash Accounts Receivable Raw Materials Inventory 21 Finished Goods Inventory Equipment Accumulated Depreciation 24 Total Assets 23 26 Liabilities & Stockholders' Equity: 27. Accounts Payable 12-31-19 BALANCE SHEET ASSUMPTIONS Type here to search D A 28 Common Stock Retained Earnings 30 Total Liabilities & Stockholders' Equity REQUIREMENTS 12-31-19 BALANCE SHEET ASSUMPTIONS MASTER o Type here to search o e ABC Company Balance Sheet December 31, 2019 Assets Cash Accounts Receivable Raw Materials Inventory (5000 pounds) Finished Goods Inventory (2500 units) Equipment Accumulated Depreciation 2 Total Assets 56,400 250,000 15,000 47,250 850,000 (212,500) 1,006,150 $ 4 Liabilities & Stockholders' Equity: 15 Accounts Payable 16 Common Stock 17 Retained Earnings 18 Total Liabilities & Stockholders' Equity 19 165,000 402.000 439,150 1,006,150 $ 20 21 til Se 24 25 26 27 REQUIREMENTS | 12-31-19 BALANCE SHEET ASSUMPTIONS Type here to search O i C D E F ABC Company e Assumptions 4 Sales: 5 Estimated Unit Sales: 2020 Q2 40,000 Q4 Q1 15,000 Q2 2021 Q11 12,000 38,000 Q3 18,000 24,000 7 Selling Price per Unit 30.00 9 Expected Cash Collections: 10 All Sales are on Account 11 Collections in Quarter of Sale 12 Collections in Quarter Following Sale 70% 30% 13 14 Production Budget: 15 Desired Ending Inventory 15% of following quarter's budgeted sales (units) 16 17 Direct Materials Budget: 18 Raw materials required to produce one unit Desired raw materials on hand 20 Raw material costs 3 pounds 10% of following month's production needs 3.00 per pound 27 75% 25% 22 Expected Cash Payments 23. Payments in the Month of Purchase 24Payments in the Month Following Purchase 25 26 Direct Labor Budget: 27 Direct Labor Required per Unit REQUIREMENTS M12-31-19 BALANCE SHEET 0.25 hours ASSUMPTIONS MASTER BUDGET FINANCIALS o Type here to search Oi e A 20.00 28 Hourly Pay Rate 29 30 Manufacturing OH Budget: 31 Variable Manufacturing OH Rate 32 Fixed Manufacturing OH 33 Depreciation 34 35 Selling & Administrative Expense Budget 36 Variable S&A Expense Rate 37 Fixed S&A Expenses 38 Depreciation 3.00 per DLH $ 99,911.25 per quarter $ 10,000 per quarter A A 1.00 per unit sold 85,000 per quarter 5,000 per quarter A A $ 30,000 50,000 40 Cash Budget: 41 Minimum cash balance Cash dividend each quarter Line of Credit: Quarterly Interest Rate Maximum Balance Borrowings occur on the first day of the quarter. Repayments occur on the last day of the quarter. 44 2.5% 150,000 45 $ 46 47 48 49 50 51 D90 X TH ABC Company Master Budget AWN 4 SALES BUDGET Q1 Q2 03 Q4 TOTAL 6 Units Sales 7 Selling Price per Unit 8 Total Budgeted Sales 11 EXPECTED CASH COLLECTIONS 01 Q2 03 Q3 Q4 TOTAL 13 Accounts Receivable, Beg. Bal. 14 Q1 Sales 15 Q2 Sales 16 Q3 Sales 17 Q4 Sales 18 Total Cash Collections 20 PRODUCTION BUDGET 01 Q2 WATQ3HWIMMBAININE Q4 W IN TOTAL Q1 Q2 22 Budgeted Unit Sales 23 Add: Desired Ending Inventory 24 Total Needs 25 Less: Beginning Inventory 26 Required Production REQUIREMENTS 12-31-19 BALANCE SHEET ASSUMPTIONS MASTER BUDGET FINANCIALS Type here to search o e NO F G Q1 Q2 Q3 Q4 TOTAL 1 28 DIRECT MATERIALS BUDGET 29 30 Required production (units) 31 Materials per unit (pounds) 32 Production needs (pounds) 33 Add: Desired Ending Inventory 34 Total needed (pounds) 35 Less: Beginning inventory 36 Raw materials to be purchased 37 Cost of raw materials per pound 38 Cost of raw materials to be purchased 39 40 EXPECTED CASH PAYMENTS 41 02 Q3 04 TOTAL 42 Accounts Payable, Beg. Bal. 43 Q1 Purchases 44 Q2 Purchases 45 Q3 Purchases 46 Q4 Purchases 47 Total cash disbursements 48 49 DIRECT LABOR BUDGET Q3 Q4 TOTAL 51 Required Production 52 Direct Labor time per unit 53 Labor hours required 54 Hourly wage rate REQUIREMENTS 12-31-19 BALANCE SHEET ASSUMPTIONS MASTER BUDGET FINANCIALS O Type here to search File Home Insert Page Layout Formulas Data Review View Help Tell me what you want to do D81 X for DELF 55 Total Direct Labor Costs 57 MANUFACTURING OVERHEAD BUDGET Q1 Q2 Q3 Q4 TOTAL 59 Budgeted Direct Labor Hours 60 Variable Mfg. OH Rate 61 Variable Mfg, OH Costs 62 Fixed Mfg. OH Costs 63 Total Mfg. OH Costs 64 Less: Noncash Costs 65 Cash Disbursement for Mfg. OH 67 SELLING AND ADMINISTRATIVE EXPENSE BUDGET Q1 Q2 Q3 Q4 TOTAL 69 Budgeted Unit Sales 70 Variable S&A Rate 71 Variable Expenses 72 Fixed S&A Expenses 73 Total S&A Expenses 74 Less: Noncash Expenses 75 Cash S&A Expenses 77 CASH BUDGET Q1 02 Q3 Q4 TOTAL 79 Beginning Cash Balance 80 Add: Cash Collections 81 Total Cash Available REQUIREMENTS 12-31-19 BALANCE SHEET ASSUMPTIONS MASTER BUDGET FINANCIALS Type here to search hp Case Study - Spring Protected View] - Excel (Unlicensed Product File Home Insert Page Layout Formulas Data Review View Helis Tell what you want to do D108 I c E E 82 Less: Cash Disbursements Materials Direct Labor Manufacturing Overhead Selling and Administrative Dividends 88 Total Disbursements 89 Excess (Deficiency) 90 Financing Borrowing Repayment 93 Interest 94 Total Financing 95 Ending Cash Balance REQUIREMENTS 12-31-19 BALANCE SHEET ASSUMPTIONS MASTER BUDGET FINANCIALS O Type here to search o e o