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5. In the fourth quarter of 2017, Winston Wheels had the following net income: Sales $400,000 Less cost of sales 150,000 Gross margin 250,000 Selling
5. In the fourth quarter of 2017, Winston Wheels had the following net income: Sales $400,000 Less cost of sales 150,000 Gross margin 250,000 Selling and administration costs 110,000 Income before taxes 140,000 Income taxes 42,000 Net income $ 98.000 Purchases in the fourth quarter of 2017 amounted to $170,000. Estimated data for 2018 follow: Sales Cost of sales Purchases Selling and admin. First Quarter $300,000 170,000 200,000 110,000 Second Quarter $350,000 200,000 230,000 110,000 Third Quarter $400,000 230,000 250.000 110,000 Fourth Quarter $450,000 150,000 280.000 110,000 Taxes are 30% of pretax income and are paid in the month of accrual. All sales are on credit and 30% are collected in the quarter of sale and 70% are collected in the next quarter 40% of purchases are paid in the quarter of purchase and 60% in the next quarter. Selling and administrative expenses are paid in the quarter incurred. There is $11,000 of depreciation included in selling and administrative expense. A capital expenditure for $40,000 is planned for the fourth quarter of 2018 Calculate total cash receipts for the second quarter of 2018
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