The management of Zigby Manufacturing prepared the following balance sheet for March 31. ZIGBY MANUFACTURING Balance Sheet March 31 Assets Liabilities and Equity Cash $ 104,000 Liabilities Accounts receivable 895,440 Accounts payable $ 522,600 Raw materials inventory 256,100 Loan payable 12,000 Finished goods inventory 846,404 Long-term note payable 1,300,000 $ 1,834,600 Equipment $ 1,560,000 Equity Less: Accumulated depreciation 390,000 1,170,000 Common stock 871,000 Retained earnings 566,344 1,437,344 Total assets $ 3,271,944 Total liabilities and equity $ 3,271,944 To prepare a master budget for April, May, and June, management gathers the following information. Sales for March total 53,300 units. Budgeted sales in units follow: April, 53,300; May, 50,700; June, 52,000; and July, 53,300. The product’s selling price is $24.00 per unit and its total product cost is $19.85 per unit. 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 12,805 pounds. The budgeted June 30 ending raw materials inventory is 10,400 pounds. Each finished unit requires 0.50 pound of direct materials. 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 42,640 units. Each finished unit requires 0.50 hour of direct labor at a rate of $15 per hour. The predetermined variable overhead rate is $2.70 per direct labor hour. Depreciation of $52,000 per month is the only fixed factory overhead item. Sales commissions of 8% of sales are paid in the month of the sales. The sales manager’s monthly salary is $7,800. Monthly general and administrative expenses include $31,200 for administrative salaries and 0.9% monthly interest on the long-term note payable. 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). 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). The minimum ending cash balance for all months is $104,000. 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. Dividends of $26,000 are budgeted to be declared and paid in May. 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. Equipment purchases of $260,000 are budgeted for the last day of June. Required: Sales budget. Production budget. Direct materials budget.

The management of Zigby Manufacturing prepared the following balance sheet for March 31. ZIGBY MANUFACTURING Balance Sheet March 31 Assets Liabilities and Equity Cash $ 104,000 Liabilities Accounts receivable 895,440 Accounts payable $ 522,600 Raw materials inventory 256,100 Loan payable 12,000 Finished goods inventory 846,404 Long-term note payable 1,300,000 $ 1,834,600 Equipment $ 1,560,000 Equity Less: Accumulated depreciation 390,000 1,170,000 Common stock 871,000 Retained earnings 566,344 1,437,344 Total assets $ 3,271,944 Total liabilities and equity $ 3,271,944 To prepare a master budget for April, May, and June, management gathers the following information. Sales for March total 53,300 units. Budgeted sales in units follow: April, 53,300; May, 50,700; June, 52,000; and July, 53,300. The product’s selling price is $24.00 per unit and its total product cost is $19.85 per unit. 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 12,805 pounds. The budgeted June 30 ending raw materials inventory is 10,400 pounds. Each finished unit requires 0.50 pound of direct materials. 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 42,640 units. Each finished unit requires 0.50 hour of direct labor at a rate of $15 per hour. The predetermined variable overhead rate is $2.70 per direct labor hour. Depreciation of $52,000 per month is the only fixed factory overhead item. Sales commissions of 8% of sales are paid in the month of the sales. The sales manager’s monthly salary is $7,800. Monthly general and administrative expenses include $31,200 for administrative salaries and 0.9% monthly interest on the long-term note payable. 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). 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). The minimum ending cash balance for all months is $104,000. 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. Dividends of $26,000 are budgeted to be declared and paid in May. 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. Equipment purchases of $260,000 are budgeted for the last day of June. Required: Sales budget. Production budget. Direct materials budget.

Name: The management of Zigby Manufacturing prepared the following balance s
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Description: The management of Zigby Manufacturing prepared the following balance sheet for March 31.ZIGBY MANUFACTURINGBalance SheetMarch 31Assets Liabilities and Equity Cash $ 104,000Liabilities Accounts receivable 895,440Accounts payable$ 522,600 Raw materi

FINANCIAL ACCOUNTING

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ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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The management of Zigby Manufacturing prepared the following balance sheet for March 31.

ZIGBY MANUFACTURING
Balance Sheet
March 31
Assets			Liabilities and Equity
Cash		$ 104,000	Liabilities
Accounts receivable		895,440	Accounts payable	$ 522,600
Raw materials inventory		256,100	Loan payable	12,000
Finished goods inventory		846,404	Long-term note payable	1,300,000	$ 1,834,600
Equipment	$ 1,560,000		Equity
Less: Accumulated depreciation	390,000	1,170,000	Common stock	871,000
			Retained earnings	566,344	1,437,344
Total assets		$ 3,271,944	Total liabilities and equity		$ 3,271,944

To prepare a master budget for April, May, and June, management gathers the following information.

Sales for March total 53,300 units. Budgeted sales in units follow: April, 53,300; May, 50,700; June, 52,000; and July, 53,300. The product’s selling price is $24.00 per unit and its total product cost is $19.85 per unit.
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 12,805 pounds. The budgeted June 30 ending raw materials inventory is 10,400 pounds. Each finished unit requires 0.50 pound of direct materials.
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 42,640 units.
Each finished unit requires 0.50 hour of direct labor at a rate of $15 per hour.
The predetermined variable overhead rate is $2.70 per direct labor hour. Depreciation of $52,000 per month is the only fixed factory overhead item.
Sales commissions of 8% of sales are paid in the month of the sales. The sales manager’s monthly salary is $7,800.
Monthly general and administrative expenses include $31,200 for administrative salaries and 0.9% monthly interest on the long-term note payable.
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).
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).
The minimum ending cash balance for all months is $104,000. 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.
Dividends of $26,000 are budgeted to be declared and paid in May.
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.
Equipment purchases of $260,000 are budgeted for the last day of June.

Required:

Sales budget.
Production budget.
Direct materials budget.
Direct labor budget.
Factory overhead budget.
Selling expense budget.
General and administrative expense budget.
Schedule of cash receipts.
Schedule of cash payments for direct materials..
Cash budget.
Budgeted income statement for entire second quarter (not monthly).
Budgeted balance sheet at June 30.

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Direct labor budget.
Factory overhead budget.
Selling expense budget.
General and administrative expense budget.
Schedule of cash receipts.
Schedule of cash payments for direct materials..
Cash budget.
Budgeted income statement for entire second quarter (not monthly).
Budgeted balance sheet at June 30.

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