Assets Cash Accounts receivable Raw materials inventory Finished goods inventory Equipment Less: Accumulated depreciation Total assets $ 40,000 Liabilities 344,400 98,500 325,540 450,000 Common stock Retained earnings $ 1,258,440 Total liabilities and equity To prepare a master budget for April, May, and June, management gathers the following information. ZIGBY MANUFACTURING Balance Sheet March 31 $ 600,000 150,000 Liabilities and Equity Accounts payable Loan payable Long-term note payable. Equity $ 201,000 12,000 500,000 335,000 210,440 $ 713,000 545,440 $ 1,258,440 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. 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. 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. I. 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.

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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How do I solve the chart?

gnment i
Sales
Cash receipts from
Cash sales
Collections of prior period sales
Total cash receipts
Materials purchases
Cash payments for
Current period purchases
Prior period purchases
Total cash payments
Beginning cash balance
Total cash available
Less: Cash payments for:
2
30³
F2
W
#
3
Schedule of Cash Receipts
April
Schedule of Cash Payments for Direct Materials
April
May
20
F3
E
$
$
$
4
$
492,000 $
$
Cash Budget
198,000 $
April
0 $
Q
R
0 $
67 5⁰
%
May
468,000 $
5
201,500 $
May
0 $
Ų
F5
A
0 $
T
June
480,000
June
June
Saved
182,000
Prev
<6
0
0
1 of 1
F6
Y
7
&
7
Next >
F7
* 00
U
8
DII
F8
9
D
F9
Transcribed Image Text:gnment i Sales Cash receipts from Cash sales Collections of prior period sales Total cash receipts Materials purchases Cash payments for Current period purchases Prior period purchases Total cash payments Beginning cash balance Total cash available Less: Cash payments for: 2 30³ F2 W # 3 Schedule of Cash Receipts April Schedule of Cash Payments for Direct Materials April May 20 F3 E $ $ $ 4 $ 492,000 $ $ Cash Budget 198,000 $ April 0 $ Q R 0 $ 67 5⁰ % May 468,000 $ 5 201,500 $ May 0 $ Ų F5 A 0 $ T June 480,000 June June Saved 182,000 Prev <6 0 0 1 of 1 F6 Y 7 & 7 Next > F7 * 00 U 8 DII F8 9 D F9
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
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