9. Schedule of cash payments for direct materials. 10. Cash budget. 11. Budgeted income statement for entire second quarter (not monthly). 12. Budgeted balance sheet at June 30. Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3 Req 4 General and administrative expense budget. Total general and administrative expenses Req 5 Req 6 ZIGBY MANUFACTURING General and Administrative Expense Budget April May 4 Req 7 June Req 8 to 10 $ $ 0 0 0 Req 11 Req 12

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question

How do I solve the chart?

es
:0
F1
Cash
Accounts receivable
Raw materials inventory
Finished goods inventory
Equipment
Less: Accumulated depreciation
Total assets
Assets
Common stock
Retained earnings
Total liabilities and equity
To prepare a master budget for April, May, and June, management gathers the following information.
2
F2
W
S
#
$ 600,000
150,000
3
a. Sales for March total 20,500 units. Budgeted sales in units follow: April, 20,500; May, 19,500; June, 20,000; and July, 20,500. The
product's selling price is $24.00 per unit and its total product cost is $19.85 per unit.
b. Raw materials inventory consists solely of direct materials that cost $20 per pound. Company policy calls for a given month's ending
materials inventory to equal 50% of the next month's direct materials requirements. The March 31 raw materials inventory is 4,925
pounds. The budgeted June 30 ending raw materials inventory is 4,000 pounds. Each finished unit requires 0.50 pound of direct
materials.
80
F3
E
c. Company policy calls for a given month's ending finished goods inventory to equal 80% of the next month's budgeted unit sales.
The March 31 finished goods inventory is 16,400 units.
d. Each finished unit requires 0.50 hour of direct labor at a rate of $15 per hour.
D
ZIGBY MANUFACTURING
Balance Sheet
March 31
e. The predetermined variable overhead rate is $2.70 per direct labor hour. Depreciation of $20,000 per month is the only fixed
factory overhead item.
f. Sales commissions of 8% of sales 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 for administrative salaries and 0.9% monthly interest on the long-
term note payable.
h. The company budgets 30% of sales to be for cash and the remaining 70% on credit. Credit sales are collected in full in the month
following the sale (no credit sales are collected in the month of sale).
$
i. All raw materials purchases are on credit, and accounts payable are solely tied to raw materials purchases. Raw materials
purchases are fully paid in the next month (none are paid in the month of purchase).
j. The minimum ending cash balance for all months is $40,000. If necessary, the company borrows enough cash using a loan to reach
the minimum. Loans require an interest payment of 1% at each month-end (before any repayment). If the month-end preliminary
cash balance exceeds the minimum, the excess will be used to repay any loans.
k. Dividends of $10,000 are budgeted to be declared and paid in May.
4
1. No cash payments for income taxes are budgeted in the second calendar quarter. Income tax will be assessed at 35% in the quarter
and budgeted to be paid in the third calendar quarter.
m. Equipment purchases of $100,000 are budgeted for the last day of June.
$ 40,000 Liabilities
344,400
98,500
325,540
450,000
$ 1,258,440
F4
R
LL
Equity
%
Accounts payable
Loan payable
Long-term note payable
5
Liabilities and Equity
오
F5
T
G
Prev
6
F6
1 of 1
Y
$ 201,000
12,000
500,000
&
7
335,000
210,440
Next >
F7
U
$ 713,000
545,440
$ 1,258,440
* 00
8
DII
F8
1
9
z
F9
H J K
0
0
F15
Transcribed Image Text:es :0 F1 Cash Accounts receivable Raw materials inventory Finished goods inventory Equipment Less: Accumulated depreciation Total assets Assets Common stock Retained earnings Total liabilities and equity To prepare a master budget for April, May, and June, management gathers the following information. 2 F2 W S # $ 600,000 150,000 3 a. Sales for March total 20,500 units. Budgeted sales in units follow: April, 20,500; May, 19,500; June, 20,000; and July, 20,500. The product's selling price is $24.00 per unit and its total product cost is $19.85 per unit. b. Raw materials inventory consists solely of direct materials that cost $20 per pound. Company policy calls for a given month's ending materials inventory to equal 50% of the next month's direct materials requirements. The March 31 raw materials inventory is 4,925 pounds. The budgeted June 30 ending raw materials inventory is 4,000 pounds. Each finished unit requires 0.50 pound of direct materials. 80 F3 E c. Company policy calls for a given month's ending finished goods inventory to equal 80% of the next month's budgeted unit sales. The March 31 finished goods inventory is 16,400 units. d. Each finished unit requires 0.50 hour of direct labor at a rate of $15 per hour. D ZIGBY MANUFACTURING Balance Sheet March 31 e. The predetermined variable overhead rate is $2.70 per direct labor hour. Depreciation of $20,000 per month is the only fixed factory overhead item. f. Sales commissions of 8% of sales 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 for administrative salaries and 0.9% monthly interest on the long- term note payable. h. The company budgets 30% of sales to be for cash and the remaining 70% on credit. Credit sales are collected in full in the month following the sale (no credit sales are collected in the month of sale). $ i. All raw materials purchases are on credit, and accounts payable are solely tied to raw materials purchases. Raw materials purchases are fully paid in the next month (none are paid in the month of purchase). j. The minimum ending cash balance for all months is $40,000. If necessary, the company borrows enough cash using a loan to reach the minimum. Loans require an interest payment of 1% at each month-end (before any repayment). If the month-end preliminary cash balance exceeds the minimum, the excess will be used to repay any loans. k. Dividends of $10,000 are budgeted to be declared and paid in May. 4 1. No cash payments for income taxes are budgeted in the second calendar quarter. Income tax will be assessed at 35% in the quarter and budgeted to be paid in the third calendar quarter. m. Equipment purchases of $100,000 are budgeted for the last day of June. $ 40,000 Liabilities 344,400 98,500 325,540 450,000 $ 1,258,440 F4 R LL Equity % Accounts payable Loan payable Long-term note payable 5 Liabilities and Equity 오 F5 T G Prev 6 F6 1 of 1 Y $ 201,000 12,000 500,000 & 7 335,000 210,440 Next > F7 U $ 713,000 545,440 $ 1,258,440 * 00 8 DII F8 1 9 z F9 H J K 0 0 F15
ignment i
para vivery Nunyewivi u
1. Sales budget.
2. Production budget.
3. Direct materials budget.
4. Direct labor budget.
5. Factory overhead budget.
6. Selling expense budget.
7. General and administrative expense budget.
8. Schedule of cash receipts.
9. Schedule of cash payments for direct materials.
10. Cash budget.
11. Budgeted income statement for entire second quarter (not monthly).
12. Budgeted balance sheet at June 30.
Complete this question by entering your answers in the tabs below.
Req 1
2
Req 2
General and administrative expense budget.
W
Total general and administrative expenses
F2
#
Req 3
3
E
20
F3
Req 4
$
4
ZIGBY MANUFACTURING
General and Administrative Expense Budget
April
May
y, and.
Req 5
< Req 6
Q
F4
R
%
LO
COM FASTLES
5
1500-1
Req 6
9
F5
AN AMA
T
Req 7
June
Req 8 to 10 >
Prev
Saved
<6
Req 8 to 10
$
$
1 of 1
F6
Y
0
0
0
&
7
Req 11
Next
F7
U
Req 12
*
8
DII
F8
I
9
F9
Transcribed Image Text:ignment i para vivery Nunyewivi u 1. Sales budget. 2. Production budget. 3. Direct materials budget. 4. Direct labor budget. 5. Factory overhead budget. 6. Selling expense budget. 7. General and administrative expense budget. 8. Schedule of cash receipts. 9. Schedule of cash payments for direct materials. 10. Cash budget. 11. Budgeted income statement for entire second quarter (not monthly). 12. Budgeted balance sheet at June 30. Complete this question by entering your answers in the tabs below. Req 1 2 Req 2 General and administrative expense budget. W Total general and administrative expenses F2 # Req 3 3 E 20 F3 Req 4 $ 4 ZIGBY MANUFACTURING General and Administrative Expense Budget April May y, and. Req 5 < Req 6 Q F4 R % LO COM FASTLES 5 1500-1 Req 6 9 F5 AN AMA T Req 7 June Req 8 to 10 > Prev Saved <6 Req 8 to 10 $ $ 1 of 1 F6 Y 0 0 0 & 7 Req 11 Next F7 U Req 12 * 8 DII F8 I 9 F9
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