Accounting help

timer Asked: Nov 18th, 2013

Question Description

The management of Zigby Manufacturing prepared the following estimated balance sheet for March, 2013: ZIGBY MANUFACTURING Estimated Balance Sheet March 31, 2013 Assets Cash $ 40,000 Accounts receivable 342,248 Raw materials inventory 98,500 Finished goods inventory 325,540 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Total current assets 806,288 Equipment, gross 600,000 Accumulated depreciation (150,000) -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Equipment, net 450,000 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Total assets $ 1,256,288 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Liabilities and Equity Accounts payable 200,500 Short-term notes payable 12,000 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Total current liabilities $ 212,500 Long-term note payable 500,000 -------------------------------------------------------------------------------- Total liabilities 712,500 Common stock 335,000 Retained earnings 208,788 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Total stockholders’ equity 543,788 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Total liabilities and equity $ 1,256,288 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- To prepare a master budget for April, May, and June of 2013, management gathers the following information. a. Sales for March total 20,500 units. Forecasted sales in units are as follows: April, 20,500; May, 19,500; June, 20,000; July, 20,500. Sales of 240,000 units are forecasted for the entire year. The product’s selling price is $23.85 per unit and its total product cost is $19.85 per unit. b. Company policy calls for a given month’s ending raw materials inventory to equal 50% of the next month’s materials requirements. The March 31 raw materials inventory is 4,925 units, which complies with the policy. The expected June 30 ending raw materials inventory is 4,000 units. Raw materials cost $20 per unit. Each finished unit requires 0.50 units of raw materials. c. Company policy calls for a given month’s ending finished goods inventory to equal 80% of the next month’s expected unit sales. The March 31 finished goods inventory is 16,400 units, which complies with the policy d. Each finished unit requires 0.50 hours of direct labor at a rate of $15 per hour. e. Overhead is allocated based on direct labor hours. The predetermined variable overhead rate is $2.70 per direct labor hour. Depreciation of $20,000 per month is treated as fixed factory overhead. f. Sales representatives’ commissions are 8% of sales and are paid in the month of the sales. The sales manager’s monthly salary is $3,000 per month. g. Monthly general and administrative expenses include $12,000 administrative salaries and 0.9% monthly interest on the long-term note payable. h. The company expects 30% of sales to be for cash and the remaining 70% on credit. Receivables are collected in full in the month following the sale (none is collected in the month of the sale). i. All raw materials 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. K. Dividends of $10,000 are to be declared and paid in May. l. No cash payments for income taxes are to be made during the second calendar quarter. Income tax will be assessed at 35% in the quarter and paid in the third calendar quarter. m. Equipment purchases of $130,000 are budgeted for the last day of June. Required: Prepare the following budgets and other financial information as required. All budgets and other financial information should be prepared for the second calendar quarter, except as otherwise noted below. Round calculations up to the nearest whole dollar, except for the amount of cash sales, which should be rounded down to the nearest whole dollar: How do i figure the taxes paid for april, may, and june

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