Themanageme-Mobilen nng prepared de Soll2:57 PM balance sheet Of March 201 40% a
ID: 2570677 • Letter: T
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Themanageme-Mobilen nng prepared de Soll2:57 PM balance sheet Of March 201 40% act Estimaled Balance Sheet March 31, 2017 Cash Accounts recenable Raw materials inventory Finishod poods inventory Total current assets Equipment, goss 5 53,000 392.400 96,600 13.920 835.920 (163,000 Equipment, net 1,318920 Liabilities and Equity Accounts payable Short-tcrm notes payable Total curnent liabilities Long-term note payabk Total liabilities Common stock Retained earnings Total stockholders equity Total liabilities and equay 5 204,800 25,000 9,800 550,000 749·N00 48,000 221,120 69,120 1318,920 To prepare a masicr budgct for Apeil, May, and June of 2017, management gathers the following infoemation Sales foe March total 21,800 units Foeccasted sales in units are as follows: Apeil, 21,800; May, 18,700 Jane, 21,000; and July 21.800 Sales of 253,000 units are forocasted for the entire year. The peoduct's selling price is $22 50 par unit and its toeal product cost is $18.00 per unit. Company policy calls fr a gnen moch's ending raw materials inventory to equal 50% ofthe next month's maenals requirements The March 31 raw materials inveniory is 4,830 units, which complies with the policy. The expected June 30 ending raw materials inventory is 5,300 wnits. Raw materials cost $20 per unit. Bach finished unit requires 0.50 units of raw materials Company policy calls for a given monh's ending finished goods inventory to equal s0% of the next month's expected unit sales. The March 31 Enished goods iaveniory is 17,440 units, which complies with the policy. 0 50 hours ef direct labee at a per hou Overhead is allocated based on direct labeer hours. The predesenmined variable everhead rate is 54.00 per dineet labor hour. Depreciation of $30,750 per month is treated as fised factory overbcad sales representatives' commissions are 8% of sales and are paid in the month of the sales. The sales manager's monthly salary is S4.300 Monthly general and administratave expenses include $25,000 ad unistrative salares and O 7% monthly interest on the long-umm note payable The company expects 20% of sales to be for cash and the remaining 807% on credit Receivables ane collected in month following the sale (none are collecied in the month of the sale). All aw materials purchases are on credit, and no payables arise from any other tramactions. One month's raw materials parchases are fully paid in the next month The minimum ending cash balance for all months is$53,000. If necessary, the company bonows enough cash using a shon-serm note to feach the minimum Short-term notes require an interest payment of 1% at each month-end (before any repaynent) If the ening cash balance exceeds the minimum, the excess will be apelied to repaying the shoet-term noies payable balance. Dividends of $23,000 ane to be declared and paid in May NO cash payments for income taxes are to be made dirng second calendar quarter. Income tax will be assessed at 40% in the quarter and paid in the third callendar quartc Equipment purchases of $143,000 ane badpeted for the last day of June Prepare the following budpets and other financial indormation as required. All budgets and other financial information should be prepared for the second calendar quarter, except as otherwise moted below. (Round caleulations up to the earest whole dellar, escept for the ameunt of cash sales, which shosld be rounded dewn te the Bcarest whole dellar.) I. Sales budget 2. Productiom bodget Raw maerials badget . Direct labor badget 5. Factory overhead badget 6. Selling expense budget , General and administrative expense budget 8, Cash budpet 9. Budpeted income statement for the entire second quarter(not for each monh separately) alculation of Cash receipts fomExplanation / Answer
ZIGBY MANUFACTURING Cash budget April May june Total Beginning cash balance 53000 140940 195080 53000 Collections from sales 490500 476550 431100 1398150 Cash available for disbursement 543500 617490 626180 1451150 Cash disbursements For raw material 204800 199300 210900 615000 For direct labor 86940 92430 97380 276750 For factory overhead 38640 41080 43280 123000 For selling and administrative expenses 72180 66600 70740 209520 For cash dividends 23000 23000 For purchase of equipment 143000 143000 Total cash disbursements 402560 422410 565300 1390270 Cash surplus 140940 195080 60880 60880 Ending cash balance 140940 195080 60880 60880 ZIGBY MANUFACTURING Income statement for the quarter ending June 30, 2017 April May june Total Sales 490500 420750 472500 1383750 Less: Cost of goods sold 394170 336540 376290 1107000 Gross margin 96330 84210 96210 276750 Operating expenses Variable selling expenses 39240 33660 37800 110700 Fixed seilling and administrative expenses 32940 32940 32940 98820 Total operating expenses 72180 66600 70740 209520 Net operating income 24150 17610 25470 67230 Income tax @ 40% 9660 7044 10188 26892 Net income 14490 10566 15282 40338 ZIGBY MANUFACTURING Balance sheet as at 1 June 30, 2017 Assets Cash 60880 Accounts receivable 378000 Raw material inventory 106000 Finished goods inventory 313920 Equipment , gross 769000 Accumulated depreciation -255250 Equipment, net 513750 Total assets 1372550 Liabilities and equity Accounts payable 214200 Short term note payable 25000 Tax payable 26892 Total current liabilities 266092 Long term note payable 520000 Total liabilities 786092 Common stock 348000 Retained earnings Beginning balance 221120 Net income for the quarter 40338 Dividend paid -23000 Ending balance 238458 Total liabilities and equity 1372550 0 Sales Budget April May june Total Sales Units 21800 18700 21000 61500 Sales Price $ 22.50 22.50 22.50 22.50 Sales Value $ 490500 420750 472500 1383750 Cash sales (20%) 98100 84150 94500 276750 Credit Sales (80%) 392400 336600 378000 1107000 Schedule of cash collections April May june Total Cash sales (20%) 98100 84150 94500 276750 Credit sales March sales 392400 392400 April sales 392400 392400 May sales 336600 336600 Total collections 490500 476550 431100 1398150 Production budget April May june Total Budgeted sales Units 21800 18700 21000 61500 Add: Desired ending inventory 14960 16800 17440 17440 (80% of next month sales) Units required 36760 35500 38440 78940 Less: Beginning inventory 17440 14960 16800 17440 Production budget 19320 20540 21640 61500 Raw material Budget April May june Total Budgeted production 19320 20540 21640 61500 Raw material required per units of production Unit 0.5 0.5 0.5 0.5 Raw material required for production 9660 10270 10820 30750 Add: Desired ending inventory of raw material 5135 5410 5300 5300 (50% of next month's prodution requirement) Total raw material required 14795 15680 16120 36050 Less: Beginning raw material 4830 5135 5410 4830 Raw material purchases units 9965 10545 10710 31220 Raw material price per unit $ 20 20 20 20 Total raw material purchases 199300 210900 214200 624400 Raw material cost 193200 205400 216400 615000 Schedule of disbursements for raw material April May june Total Raw material purchases 199300 210900 214200 624400 Cash disbursement for raw maaerial March purchases 204800 204800 April purchases 199300 199300 May purchases 210900 210900 Total disbursements 204800 199300 210900 615000 Direct labor budget April May june Total Budgeted production units 19320 20540 21640 61500 Direct labor hours per unit hours 0.5 0.5 0.5 0.5 Total direct labor hrs 9660 10270 10820 30750 Direct labor cost per hr $ 9 9 9 9 Direct labor cost 86940 92430 97380 276750 Budgeted direct labor hours 9660 10270 10820 30750 Variable factory overhead rate per labor hr $ 4 4 4 Variable factory overhead 38640 41080 43280 123000 Fixed factory overhead 30750 30750 30750 92250 (Depreciation) Selling and administrative expenses budget April May june Total Budgeted sales value 490500 420750 472500 1383750 Sales commission (8% of sales) 39240 33660 37800 110700 Fixed selling & administration expenses Sales manager salary 4300 4300 4300 12900 Administration expenses 25000 25000 25000 75000 Interest on long term note interest (0.7% of $520,000) 3640 3640 3640 10920 Fixed selling & administration expenses 32940 32940 32940 98820 Total selling and administrative expenses 72180 66600 70740 209520 Cost of goods sold April May june Total Raw materials 193200 205400 216400 615000 Direct labor 86940 92430 97380 276750 Variable factory overhead 38640 41080 43280 123000 Fixed factory overhead 30750 30750 30750 92250 Total Factory cost 349530 369660 387810 1107000 Add: Cost of opening stock 313920 269280 302400 313920 663450 638940 690210 1420920 Less: Cost of closing stock 269280 302400 313920 313920 Cost of goods sold 394170 336540 376290 1107000
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