Linda Corporation, a rapidly expanding distributor to retail outlets, is in the process of formulating plans for 20B. J. Caldwell, director of marketing, has completed the 20B sales forecast and is confident that sales estimates will be met or exceeded. The following sales figures show the growth expected and will provide the planning basis for other corporate departments.

G. Brownell, assistant controller, has been given the responsibilityof formulating the cash flow projection, a critical element during a period of rapid expansion. The following information will be used in the cash analysis preparation.
(a) The corporation has experienced an excellent record in accounts receivable collection and expects this trend to continue. Sixty percent of billings are collected in the month after the sale and 40% in the second month after sale. Uncollectible accounts are nominal and will not be considered in the analysis.
(b) The purchase of inventory is the company's largest expenditure; the cost of these items equals 50% of sales. Sixty percent of the inventory is received one month prior to sale and 40% is received in the month of sale.
(c) Prior experience shows that 80% of accounts payable is paid by the company one month after receipt of the purchased inventory, and the remaining 20% is paid in the second month after receipt.
(d) Hourly wages, including fringe benefits, are equal to 20% of the current month's sales. The wages are paid in the month incurred.
(e) General and administrative expenses are projected to be $2,640,000 for 20B. All these expenses are incurred uniformly throughout the year except the property taxes. Property taxes are paid in four equal installments in the last month of each quarter. The composition of the expenses is as follows:

(f) Income tax payments are made by the company in the first month of each quarter based on the income for the previous quarter. The company's income tax rate is 40%. The company's income before taxes for the first quarter of 20B is projected to be $1,020,000.
(g) The company has a corporate policy of maintaining an end-of-month cash balance of $100,000. Cash is invested or borrowed monthly, as necessary, to maintain this balance.
(h) The company has a calendar-year reporting period.
Required:
Prepare a schedule of cash receipts and disbursements for the corporation, by month, for the second quarter of 20B. Be sure that all receipts, disbursements, and borrowing/investing amounts are presented on a monthly basis. Ignore interest expense and interest income associated with borrowing and investing.

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Month Gross Sales .. $1,800,000 2,000,000 1,800,000 2,200,000 2,500,000 .2,800,000 3,000,000 . 3,000,000 3,200,000 3,200,000 3,000,000 3,400,000 January February. March Aprilm May June July August.... September. Novembe. December Salaries Promotion... Property taxes... Insurance... Utilities Depreciation S 480,000 660,000 240,000 360,000 300,000 600,000 Total