ZIGBY MANUFACTURING Estimated Balance Sheet March 31, 2019 Assets Cash Accounts recevable Raw materials inventory Finished goods inventory Total current aeta 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, 19.500June, 20,000and 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). 1. 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. 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. Answer is not complete. 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 Selling expense budget. Total Budgeted sales Sales commission percent Sales commissions Sales salaries Total budgeted selling expenses ZIGBY MANUFACTURING Selling Expense Budget April, May, and June 2019 April May June $ 488,925$ 465,075 $ 477,000 1% X 1% 1% $ 39,114$ 3,721 $ 3,816 3,000 3,000 3,000 $ 42,114 $ 6,721 $ 6,816 $ 46,651 9,000 $ 55,651 Cash budget. (Negative balances and Loan repayment amounts (if any) should be indicated with minus sign.) Calculation of Cash receipts from customers: Total budgeted sales Cash sales Sales on credit April May June $ 488,925$ 465,075$ 477,000 146,677 139,522 143, 1000 $ 342,248$ 325,553 $ 333.900 30% 70% Total cash receipts from customers April May June Current month's cash sales Collections of receivables Total cash receipts $ 0 $ 0 $ 0 ZIGBY MANUFACTURING Cash Budget April, May, and June 2019 April $ 40,000 $ 488,925 528,925 May June 83,346 $ 124,295 481,770 468,653 565,116 592.948 > Beginning cash balance Cash receipts from customers Total cash available Cash payments for: Raw materials Direct labor Variable overhead Sales commissions Sales salaries General & administrative salaries Dividends Loan interest Long-term note interest Purchases of equipment OOO 0 0 Total cash payments Preliminary cash balance Additional loan (loan repayment) Ending cash balance > Loan balance April May June Loan balance - Beginning of month Additional loan (loan repayment) Loan balance - End of month 1,431,000 1,191,000 240,000 ZIGBY MANUFACTURING Budgeted Income Statement For Three Months Ended June 30, 2019 Sales Cost of goods sold Gross profit Operating expenses Sales commissions $ 114,480 Sales salaries 9,000 General administrative salaries 36,000 Long-term note interest 13,500 Bank loan interest expense 120 Income taxes payable X Total operating expenses 173,100 66.900 $ 66,900 ZIGBY MANUFACTURING Budgeted Balance Sheet June 30, 2019 Assets Total current assets Equipment, net Total assets Llabilities and Equity Liabilities Total current liabilities Stockholders' Equity Total Stockholders' Equity Total Liabilities and Equity