Waterways Corporation is preparing its budget for the coming year, 2020. The first step is to plan for the first quarter of that coming year. The company has gathered information from its managers in preparation of the budgeting process. Sales Unit sales for November 2019 113.000 Unit sales for December 2019 102,000 Expected unit sales for January 2020 112,000 Expected unit sales for February 2020 111,000 Expected unit sales for March 2020 115.000 Expected unit sales for April 2020 124,000 Expected unit sales for May 2020 137,000 Unit selling price $12 Waterways likes to keep 10% of the next month's unit sales in ending inventory. All sales are on account. 85% of the Accounts Receivable are collected in the month of sale, and 15% of the Accounts Receivable are collected in the month after sale. Accounts receivable on December 31, 2019, totaled $183,600. Direct Materials Direct materials cost 80 cents per pound. Two pounds of direct materials are required to produce each unit. Waterways likes to keep 5% of the materials needed for the next month in its ending inventory. Raw Materials on December 31, 2019, totaled 11,190 pounds. Payment for materials is made within 15 days. 50% is paid in the month of purchase, and 50% is paid in the month after purchase. Accounts Payable on December 31, 2019, totaled $103.445. Direct Labor Labor requires 12 minutes per unit for completion and is paid at a rate of $6 per hour. Manufacturing Overhead Indirect materials 30$ per labor hour Indirect labor 50 per labor hour Utilities 50 per labor hour Maintenance 30 per labor hour Salaries $41,000 per month Depreciation $15,300 per month Waterways likes to keep 5% of the materials needed for the next month in its ending inventory. Raw Materials on December 31, 2019, totaled 11,190 pounds. Payment for materials is made within 15 days. 50% is paid in the month of purchase, and 50% is paid in the month after purchase. Accounts Payable on December 31, 2019, totaled $103,445. Direct Labor Labor requires 12 minutes per unit for completion and is paid at a rate of $6 per hour. Manufacturing Overhead Indirect materials 30 per labor hour Indirect labor 50 per labor hour Utilities 50 per labor hour Maintenance 30 per labor hour Salaries $41,000 per month Depreciation $15,300 per month Property taxes $2,900 per month Insurance $1,300 per month Maintenance $1,300 per month Selling and Administrative Variable selling and administrative cost per unit is $1.40. Advertising $16,000 a month Insurance $1,400 a month Salaries $72,000 a month Depreciation $2,700 a month Other fixed costs $3,300 a month Other Information The Cash balance on December 31, 2019, totaled $101,000, but management has decided it would like to maintain a cash balance of at least $800,000 beginning on January 31, 2020. Dividends are paid each month at the rate of $2.30 per share for 5,330 shares outstanding. The company has an open line of credit with Romney's Bank. The terms of the agreement requires borrowing to be in $1,000 increments at 6% interest. Waterways borrows on the first day of the month and repays on the last day of the month. A $530,000 equipment purchase is planned for February For the first quarter of 2020, prepare a sales budget. WATERWAYS CORPORATION Sales Budget For the First Quarter of 2020 First Quarter February January March Quarter Expected Unit Sales Unit Selling Price Total Sales WATERWAYS CORPORATION Production Budget For the First Quarter of 2020 First Quarter January February March Expected Unit Sales Add : Desired Ending Finished Goods Unit Total Required Units Less : Beginning Finished Goods Unit Required Production Units WATERWAYS CORPORATION Direct Materials Budget For the First Quarter of 2020 First Quarter January February March Units to be Produced Direct Materials Per Unit Total Pounds Required for Production Add Desired Ending Inventory Total Materials Required Less : Beginning Materials Inventory Cost Per Pound Direct Materials Purchases Total Cost of Direct Materials Purchases WATERWAYS CORPORATION Direct Labor Budget For the First Quarter of 2020 First Quarter January February March Units to be produced Direct Labor Time (Hours) Per Unit Total Required Direct Labor Hours Direct Labor Cost Per Hour Total Direct Labor Cost WATERWAYS CORPORATION Manufacturing Overhead Budget For the First Quarter of 2020 First Quarter February January March Variable Costs Indirect Labor Indirect Materials Maintenance Utilities Total Variable Cost Fixed Costs Depreciation Insurance Maintenance Property Taxes Salaries Total Fixed Costs Total Manufacturing Overhead WATERWAYS CORPORATION Selling and Administrative Expense Budget For the First Quarter of 2020 First Quarter February Quarte Budget Sales In Units Variable Expenses Per Unit Total Variable S & A Expense Fixed Expenses Advertising Depreciation Insurance Other Salaries Total Fixed Expenses Total S&A Expenses For the first quarter of 2020, prepare a schedule for expected cash collections from customers. Schedule of Expected Collections from Customers February March January Quarter Accounts receivable, 12/31/19 January sales February sales March sales Total cash collections For the first quarter of 2020, prepare a schedule for expected payments for materials purchases. (Round answers to 0 decimal places, e.g. 2,520.) Schedule of Expected Cash Payments for Purchases February March January Quarter Accounts payable, 12/31/19 January February March Total payments $ WATERWAYS CO Cash B For the First Quarter First Qu January Beginning Cash Balance Add Receipts Collections From Customers Total Available Cash Less Disbursements Direct Labor Direct Materials Dividends Equipment Purchase Manufacturing Overhead Selling And Administrative Total Disbursements Excess (Dehciency) Of Available Cash Over Cash Disbursements Financing Add : Borrowings Less Interest Repayments Ending Cash Balance