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Company policy calls for a given month's ending raw materials inventory to equal 50% of the next month's material requirements. The March 31 raw materials inventory complies with the policy. It is 50% of the April materials needed for production. The expected June 30 ending raw materials inventorv is 4.000 units. Raw materials cost $20 per unit. Each finished unit requires 0.50 units of raw materials. e. Overhead is allocated based on direct labor hours. Applicable information is as follows: Predetermined Overhead Rate Fixed Factory Overhead (all is Depreciation \$ 20,900 per month f. Sales commissions and salaries are as follows: g. Monthly general and admin expenses inclu h. Receivables are collected in full in the month following the sale (none are collected in the month of the sale). The breakdown of sales is as follows: Cash sales 30% Credit sales 70% i. All raw material purchases are on credit, and no payables arise from any other transactions. One month's raw materials purchases are fully paid in the next month. j. The minimum ending cash balance for all months is $40,000. If necessary, the company borrows enough cash using a short-term 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. This portion of the assignment is EXTRA CREDIT, see Rubric. k. Dividends of $10,000 are to be declared and paid in May. I. No cash payments for income taxes are to be made during the second calendar quarter. Income tax will be assessed at 21% in the quarter and paid in the third calendar quarter. m. Equipment purchases of $130,000 are budgeted for the last day of June. Zigby Manufacturing Cash Budgets For the months of April, May and June 2024 \begin{tabular}{|c|c|c|c|c|} \hline & April & May & & June \\ \hline Beginning cash balance & 49,781 & $(3,663,445) & $ & 151,726 \\ \hline \multicolumn{5}{|l|}{ Cash collections from: } \\ \hline Cash sales & 137,699 & 130,982 & & 134,340 \\ \hline Receivables collected & 342,104 & 239,473 & & 167,631 \\ \hline Total cash available & 529,584 & 370,454 & & 301,971 \\ \hline \multicolumn{5}{|l|}{ Cash payments for: } \\ \hline Raw materials & 205,000 & 143,500 & & 143,500 \\ \hline Direct labor & 3,341,664 & 14,292 & & 260,604 \\ \hline Variable overhead & 594,074 & 2,541 & & 92,659 \\ \hline Selling expenses & 30,940 & 29,596 & & 30,268 \\ \hline General and administrative expenses & 18,642 & 18,642 & & 18,642 \\ \hline Interest on short term note & 158.00 & 158.00 & & 158.00 \\ \hline Dividends & 0 & 10,000 & & 0 \\ \hline Purchase of equipment & 0 & 0 & & 130,000 \\ \hline Total cash payments & 4,190,477 & 218,729 & & 675,831 \\ \hline Preliminary cash balance & (3,660,893) & 151,726 & & (373,860) \\ \hline Additional loan & 2,552 & & & 242,718 \\ \hline Repayment of loan to bank & - & - & & - \\ \hline Ending cash balance & $(3,663,445) & $151,726 & $ & (616,578) \\ \hline Short term notes payable at end of mont & $ & $ & $ & \\ \hline \end{tabular} \begin{tabular}{|c|c|c|} \hline \multicolumn{3}{|c|}{\begin{tabular}{c} Zigby Manufacturing \\ Budgeted Income Statement \\ June 30, 2024 \end{tabular}} \\ \hline Sales & & $1,343,400 \\ \hline Cost of Goods Sold & & 2,472,000 \\ \hline Gross Profit & & (1,128,600) \\ \hline \multicolumn{3}{|l|}{ Operating expenses } \\ \hline Sales commissions & $80,604 & \\ \hline Sales salaries & 10,200 & \\ \hline General and administrative salaries & 40,200 & \\ \hline Long-term note interest & 55,925 & \\ \hline Interest expense on short term note & - & 186,929 \\ \hline Income before taxes & & (1,315,529) \\ \hline Income taxes@ 21\% & & (276,261) \\ \hline Net income/(loss) & & $(1,591,790) \\ \hline \end{tabular} \begin{tabular}{|l|r|} \hline Total Product cost per unit: & \\ \hline DM per unit & 20.00 \\ \hline DL per unit & 18.00 \\ \hline MOH per unit & 3.20 \\ \hline & - \\ \hline Total Product cost per unit & 41.20 \\ \hline \end{tabular} \begin{tabular}{|c|c|c|} \hline \multicolumn{3}{|c|}{\begin{tabular}{c} Zigby Manufacturing \\ Budgeted Balance Sheet \\ June 30, 2024 \end{tabular}} \\ \hline \multicolumn{3}{|l|}{ ASSETS } \\ \hline \multicolumn{3}{|l|}{ Cash } \\ \hline Accounts receivable & & 301,971 \\ \hline Raw materials inventory & & 98,500 \\ \hline Finished goods inventory & & 337,594 \\ \hline Total current assets & & 738,065 \\ \hline Equipment & $657,600 & \\ \hline Less Accumulated depreciation & (131,900) & 525,700 \\ \hline TOTAL ASSETS & & $1,263,765 \\ \hline \multicolumn{3}{|l|}{ LIABILITIES AND EQUITY } \\ \hline Accounts payable & & $205,000 \\ \hline Short term loan payable & & 15,800 \\ \hline Income taxes payable & & (276,261) \\ \hline Total current liabilities & & (55,461) \\ \hline Long term note payable & & 582,400 \\ \hline Common stock & 386,300 & \\ \hline Retained earnings & 34,179 & \\ \hline Total stockholders' equity & & 420,479 \\ \hline TOTAL LIABILITIES AND EQUITY & & $947,418 \\ \hline \end{tabular} Company policy calls for a given month's ending raw materials inventory to equal 50% of the next month's material requirements. The March 31 raw materials inventory complies with the policy. It is 50% of the April materials needed for production. The expected June 30 ending raw materials inventorv is 4.000 units. Raw materials cost $20 per unit. Each finished unit requires 0.50 units of raw materials. e. Overhead is allocated based on direct labor hours. Applicable information is as follows: Predetermined Overhead Rate Fixed Factory Overhead (all is Depreciation \$ 20,900 per month f. Sales commissions and salaries are as follows: g. Monthly general and admin expenses inclu h. Receivables are collected in full in the month following the sale (none are collected in the month of the sale). The breakdown of sales is as follows: Cash sales 30% Credit sales 70% i. All raw material purchases are on credit, and no payables arise from any other transactions. One month's raw materials purchases are fully paid in the next month. j. The minimum ending cash balance for all months is $40,000. If necessary, the company borrows enough cash using a short-term 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. This portion of the assignment is EXTRA CREDIT, see Rubric. k. Dividends of $10,000 are to be declared and paid in May. I. No cash payments for income taxes are to be made during the second calendar quarter. Income tax will be assessed at 21% in the quarter and paid in the third calendar quarter. m. Equipment purchases of $130,000 are budgeted for the last day of June. Zigby Manufacturing Cash Budgets For the months of April, May and June 2024 \begin{tabular}{|c|c|c|c|c|} \hline & April & May & & June \\ \hline Beginning cash balance & 49,781 & $(3,663,445) & $ & 151,726 \\ \hline \multicolumn{5}{|l|}{ Cash collections from: } \\ \hline Cash sales & 137,699 & 130,982 & & 134,340 \\ \hline Receivables collected & 342,104 & 239,473 & & 167,631 \\ \hline Total cash available & 529,584 & 370,454 & & 301,971 \\ \hline \multicolumn{5}{|l|}{ Cash payments for: } \\ \hline Raw materials & 205,000 & 143,500 & & 143,500 \\ \hline Direct labor & 3,341,664 & 14,292 & & 260,604 \\ \hline Variable overhead & 594,074 & 2,541 & & 92,659 \\ \hline Selling expenses & 30,940 & 29,596 & & 30,268 \\ \hline General and administrative expenses & 18,642 & 18,642 & & 18,642 \\ \hline Interest on short term note & 158.00 & 158.00 & & 158.00 \\ \hline Dividends & 0 & 10,000 & & 0 \\ \hline Purchase of equipment & 0 & 0 & & 130,000 \\ \hline Total cash payments & 4,190,477 & 218,729 & & 675,831 \\ \hline Preliminary cash balance & (3,660,893) & 151,726 & & (373,860) \\ \hline Additional loan & 2,552 & & & 242,718 \\ \hline Repayment of loan to bank & - & - & & - \\ \hline Ending cash balance & $(3,663,445) & $151,726 & $ & (616,578) \\ \hline Short term notes payable at end of mont & $ & $ & $ & \\ \hline \end{tabular} \begin{tabular}{|c|c|c|} \hline \multicolumn{3}{|c|}{\begin{tabular}{c} Zigby Manufacturing \\ Budgeted Income Statement \\ June 30, 2024 \end{tabular}} \\ \hline Sales & & $1,343,400 \\ \hline Cost of Goods Sold & & 2,472,000 \\ \hline Gross Profit & & (1,128,600) \\ \hline \multicolumn{3}{|l|}{ Operating expenses } \\ \hline Sales commissions & $80,604 & \\ \hline Sales salaries & 10,200 & \\ \hline General and administrative salaries & 40,200 & \\ \hline Long-term note interest & 55,925 & \\ \hline Interest expense on short term note & - & 186,929 \\ \hline Income before taxes & & (1,315,529) \\ \hline Income taxes@ 21\% & & (276,261) \\ \hline Net income/(loss) & & $(1,591,790) \\ \hline \end{tabular} \begin{tabular}{|l|r|} \hline Total Product cost per unit: & \\ \hline DM per unit & 20.00 \\ \hline DL per unit & 18.00 \\ \hline MOH per unit & 3.20 \\ \hline & - \\ \hline Total Product cost per unit & 41.20 \\ \hline \end{tabular} \begin{tabular}{|c|c|c|} \hline \multicolumn{3}{|c|}{\begin{tabular}{c} Zigby Manufacturing \\ Budgeted Balance Sheet \\ June 30, 2024 \end{tabular}} \\ \hline \multicolumn{3}{|l|}{ ASSETS } \\ \hline \multicolumn{3}{|l|}{ Cash } \\ \hline Accounts receivable & & 301,971 \\ \hline Raw materials inventory & & 98,500 \\ \hline Finished goods inventory & & 337,594 \\ \hline Total current assets & & 738,065 \\ \hline Equipment & $657,600 & \\ \hline Less Accumulated depreciation & (131,900) & 525,700 \\ \hline TOTAL ASSETS & & $1,263,765 \\ \hline \multicolumn{3}{|l|}{ LIABILITIES AND EQUITY } \\ \hline Accounts payable & & $205,000 \\ \hline Short term loan payable & & 15,800 \\ \hline Income taxes payable & & (276,261) \\ \hline Total current liabilities & & (55,461) \\ \hline Long term note payable & & 582,400 \\ \hline Common stock & 386,300 & \\ \hline Retained earnings & 34,179 & \\ \hline Total stockholders' equity & & 420,479 \\ \hline TOTAL LIABILITIES AND EQUITY & & $947,418 \\ \hline \end{tabular}

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