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The management of Zigby Manufacturing prepared the following estimated balance sheet for March 2017 ZIGBY MANUFACTURING Estimated Balance Sheet March 31, 2017 Assets Cash Accounts receivable Raw materials inventory Finished goods inventory Total current assets Equipment, gross Accumulated depreciation Equipment, net Total assets $ 56,000 341,250 84,200 337,680 819,130 632,000 166,008 466,000 $ 1,285,130 Liabilities and Equity Accounts payable Short-term notes payable Total current liabilities Long-term note payable Total 1iabilities Common stock Retained earnings Total stockholders equity Total liabilities and equity $ 189,800 28,000 217,800 516,000 733,800 351,000 200,330 551,330 $ 1,285,130 To prepare a master budget for April, May, and June of 2017, management gathers the following informationa. Sales for March total 21,000 units. Forecasted sales in units are as follows: April, 21,000; May, 15,800; June, 21,600; and July, 21,000 Sales of 256,000 units are forecasted for the entire year. The products selling price is $25.00 per unit and its total product cost is $20.10 per unit. b. Company policy calls for a given months ending raw materials inventory to equal 50% of the next months materials requirements. The March 31 raw materials inventory is 4,210 units, which complies with the policy. The expected June 30 ending raw materials inventory is 5,600 units. Raw materials cost $20 per unit. Each finished unit requires 0.50 units of raw materials c. Company policy calls for a given months ending finished goods inventory to equal 80% of the next months expected unit sales. The March 31 finished goods inventory is 16,800 units, which complies with the policy d. Each finished unit requires 0.50 hours of direct labor at a rate of $12 per hour e. Overhead is allocated based on direct labor hours. The predetermined variable overhead rate is $4.30 per direct labor hour f. Sales representatives commissions are 7% of sales and are paid in the month of the sales. The sales managers monthly salary is g. Monthly general and administrative expenses include $28,000 administrative salaries and 0.5% monthly interest on the long-term h. The company expects 35% of sales to be for cash and the remaining 65% on credit. Receivables are collected in full in the month i. All raw materials purchases are on credit, and no payables arise from any other transactions. One months raw materials purchases j. The minimum ending cash balance for all months is $56,000. If necessary, the company borrows enough cash using a short-term Depreciation of $37,960 per month is treated as fixed factory overhead $4,600 note payable following the sale (none are collected in the month of the sale). are fully paid in the next month. 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 $26,000 are to be declared and paid in May 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 $146,000 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.Required 1 Required 2 Required 3 Required 4 Required 5 Required 6 Required 7 Required 8 Required 9 Required 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 Cash sales Sales on credit $525,000 395,000 540,000 183,750 138,250189,000 65% |$. 341.25 $ 256.750 351.000 35% Total cash receipts from customers April June Current months cash sales Collections of receivables Total cash receipts $183,750 S 138,250 S 189,000 41,250 341,250256,750 $ 525,000 S 479,500 445,750 ZIGBY MANUFACTURING Cash Budget April, May, and June 2017 April May June Beginning cash balance Cash receipts from customers Total cash available Cash payments for: $56,000 153,744 191,428 445,750 637,178 525,000 479,500 581,000 633,244Cash payments for: Raw materials Direct labor Variable overhead Sales commissions Sales salaries General & administrative salaries Loan interest Long-term note interest Purchases of equipment Dividends 189,800 101,040 36,206 36,750 4,600 28,000 280 2,580 186,400 122,640 43,946 27,650 4,600 28,000 207,800 126,720 45,408 37,800 4,600 28,000 2,580 146,000 2,580 26,000 Total cash payments Preliminary cash balance Additional loan (loan repayment) Ending cash balance 399,256 181,744 (28,000) $153,744 441,816 598,908 191,428 38.270 о 191,428 S 38,270 Loan balance April May June $ 28,000S Loan balance Beginning of month Additional loan (loan repayment) Loan balance - End of month (28,000)

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Direct Labor Budget April, May, and June 2017 16,840 8,420 Ma June Total Bu Labor requirements per unit Total labor hours needed Labor rate Labor dollars ted production (units 20,440 21120 0.5 10,560 29200 10,220 r hour 101040 122640 126720 350400 Fa Overhead Budget April, May, and June 2017 ril June Total 10,220 4.3 43946 37,960 81,906 10,560 Labor hours needed Variable factory overhead rate Budgeted variable overhead Budgeted fixed overhead Budgeted total overhead 4.3 36206 4.3 45408 125560 74,166 Selling Expense Budget ril, May, and June 2017 Ma June Total Bu Sales commission percent Sales commissions Sales salaries ted sales 525,000 7% 395,000 540,000 7% 4.600 32.250 37800 102200 4,600 13800 42 400 116,000 Total seli 41,350 General and Administrative Expense Budgets April, May, and June 2017 ril Ma June Total 28000 28000 28000 Interest on long-term note (516000.5% Total expenses 30.580 30,580 0 58091740 Sheel 104 Sheel 105 Sheetl 106 Sheet1 107 Sheet1 108Sheet1109 Sheeti 110 Sheet1111 ENG US 07/01/2019 09:49Calculation of Cash receipts from customers: April June Total Cash sales Sales on credit 525,000 395.000 540,000 138250189000Cash Budget April, May, and June 2017 AprMayJune 56000153744 191428 525.000 479.500 445,750 581,000633,244 637,178 Be Cash receipts from customers Total cash available Cash disbursements Pa Pa cash balance for raw materials ts for direct labor ts for variable overhead 89,800 186,400 207,800 01.040122,640 126,720 36.206 43,94645,408 36,75027,65037,800 Sales commissions Sales salaries General & administrative salaries Dividends Loan interest Long-tenm note interest Purchases of e Taxes paid Total cash disbursements 4.600 4,600 4,600 28,00028,00028,000 26,000 280 146,000 399.256441,816 598,908 181,744 191,42838,270 0 17,730 53,744191,428 56,000 cash balance Additional loan (loan En 28,000 cash balance Loan balance ApriM 28000 28,000 June Loan balance Beginning of month ditional loan Loan balance End of month 017730 017,730 Sheel 104 Sheel 105 Sheet1 106 Sheet1 107 Sheet1108Sheet1109 Sheeti 110 Sheet1111 ENG US 07/01/2019 09:49

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