2023 Each person must complete a master budget using linking spreadsheets in Google Docs This is a free | Assignments Online

Each person must complete a master budget using linking spreadsheets in Google Docs. This is a free webbased product that is similar to Microsoft Excel. The details to be budgeted are detailed in Chapter 7, Problems
7-7A on page 262. An example is displayed here in Google Docs (you will need to set up a Google account if
you do not have one) https://docs.google.com/spreadsheet/ccc?
key=0AgmH5rG6dzTmdEEyeTYxS0wyTXVsSW14X1RpcXdiUFE
The purpose of this project is to assess your level of knowledge of the master budget process and your ability to
create a simple master budget using an electronic spreadsheet. If you are not an experienced spreadsheet user,
this project will take longer because you will need to learn some basic spreadsheet tools. We will spend some
class time on the basics, but if you are a beginner, this is a good excuse to invest some time building your
electronic spreadsheet skills.
1-10 All
Change 9 to Form Frist Quarter to Entire Second Quarter (not for each Monthly
separately.)

 

The management of Zigby Manufacturing prepared the following estimated balance sheet for March, 2013:

ZIGBY MANUFACTURING
Estimated Balance Sheet
March 31, 2013
Assets 
Cash $ 59,000 
Accounts receivable 487,500 
Raw materials inventory 93,010 
Finished goods inventory 433,000 

Total current assets 1,072,510 
Equipment, gross 638,000 
Accumulated depreciation (169,000) 

Equipment, net 469,000 

Total assets $ 1,541,510 

Liabilities and Equity 
Accounts payable 215,410 
Short-term notes payable 31,000 

Total current liabilities $ 246,410 
Long-term note payable 530,000 

Total liabilities 776,410 
Common stock 354,000 
Retained earnings 411,100 

Total stockholders’ equity 765,100 

Total liabilities and equity $ 1,541,510 

To prepare a master budget for April, May, and June of 2013, management gathers the following information.

a. 

Sales for March total 25,000 units. Forecasted sales in units are as follows: April, 25,000; May, 17,000; June, 22,400; July, 25,000. Sales of 259,000 units are forecasted for the entire year. The product’s selling price is $26.00 per unit and its total product cost is $21.65 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 4,650 units, which complies with the policy. The expected June 30 ending raw materials inventory is 5,900 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 20,000 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 $4.60 per direct labor hour. Depreciation of $39,710 per month is treated as fixed factory overhead.
f. 

Sales representatives’ commissions are 5% of sales and are paid in the month of the sales. The sales manager’s monthly salary is $4,900 per month.
g. 

Monthly general and administrative expenses include $34,000 administrative salaries and 0.8% monthly interest on the long-term note payable.
h. 

The company expects 25% of sales to be for cash and the remaining 75% 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 $98,000. 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 $29,000 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 40% in the quarter and paid in the third calendar quarter.
m. Equipment purchases of $149,000 are budgeted for the last day of June.

Required:
Requirements

1-10 All

Change 9 to Form Frist Quarter to Entire Second Quarter (not for each Monthly separately.)

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: