. . 5.2 Comprehensive Cash Budget (CMA adapted) (LO 4) PlantMaster Products, a rapidly growing distribu hor of home gardening equipment, is formulating its plans for 2014. Jewel Cairn, the firm's marketing director, has completed the following sales forecast. Month Sales Month Sales January $ 900.000 SI S00.000 February $1.000.000 March August S1 500 000 $ 900.000 September $1 600 000 April SH150.000 May October $1.600.000 $1,250,000 November SI 500 000 June 51.400.000 December $1.700.000 Sal Pietro an accountant in the Planning and Budgeting Department is responsible for prepanng the cash flow projection He has gathered the following information All sales are made on credit PlantMaster's excellent record in accounts receivable collection is expected to continue with 70 percent of blings col lected in the month after sale and the remaining 30 percent collected two months after the sale Invento PAS dan bersendung beorthe Far ber belit of Aprilagoas's tenseulandi pe certy to goods sold is barchased All purchases are made on account Histoncally. Bb percent of accounts payable have been paid during the month of purchase, and the remaining 20 percent in the month following purchase Hourly wages and fringe benefits estimated at 30 percent of the cutrent month's sales are paid in the month incurred General and administrative expenses are projected to be $1550.000 for the year A breakdown of the expenses follows All expenditures are paid monthly, throughout the year with the exception of property taxes which are pad in four equal installments at the end of each quarter Salaries and fringe benefits 5321000 - togst honthy Prices Advertising 372.000 Property taxes 136,000 wortel only june) Insurance 192.000 Utilities 180.000 - . Total SLS . Operating income for the first quarter of 2014 is projected to be $320.000 PlantMaster is subject to a 40 percent tax rate The company pays 100 percent of its estimated taxes in the month following the end of each quarter PlantMaster maintains a minimum cash balance of $50.000 If the cash balance is less than $50.900 at the end of the month the company borrows against its 6 percent line of credit in order to maintain the balance All borrowings are made at the beginning of the month and all repayments are made at the end of the month (in increments of $1.000 Accrued interest is paid in full with each principal repayment. The projected cash balance on April 1. 2014 580.000 Ath you on tay exspense Direct mat. erraus Required a Prepare the cash receipts budget for the second quarter of 2014 1483 750 march Prepare the purchases budget for the second quarter of 2014 c Prepare the cash payments budget for the second quarter of 2014 d Prepare the cash budget for the second quarter of 2014 M Feb 4000,1000 x 30 609 750 may 6blics mar 400,000 30 June ADRI 1.750,000 70 May 1,450,000 549000 April j RI) .30 70
