Crane Products, a rapidly growing distributor of home gardening equipment, is formulating its plans for the coming year. Carol Jones, the firms marketing director, has completed the following sales forecast. January $900,000 February $1,000,000 March $900,000 April $1,150,000 May 1,250,000 June 1,400,000 July $1,500,000 August $1,500,000 September $1,600,000 October $1,600,000 November $1,500,000 December $1,700,000 Phillip Smith, an accountant in the Planning and Budgeting Department, is responsible for preparing the cash flow projection. He has gathered the following information. All sales are made on credit.Cranes excellent record in accounts receivable collection is expected to continue, with 60% of billings collected in the month after sale and the remaining 40% collected two months after the sale.Cost of goods sold, Cranes largest expense, is estimated to equal 40% of sales dollars. Seventy percent of inventory is purchased one month prior to sale and 30% during the month of sale. For example, in April, 30% of April cost of goods sold is purchased and 70% of May cost of goods sold is purchased.All purchases are made on account. Historically, 75% of accounts payable have been paid during the month of purchase, and the remaining 25% in the month following purchase.Hourly wages and fringe benefits, estimated at 30% of the current months sales, are paid in the month incurred.General and administrative expenses are projected to be $1,540,000 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 paid in four equal instalments at the end of each quarter.Salaries and fringe benefits $ 320,000 Advertising 370,000 Property taxes 136,000 Insurance 190,000 Utilities 178,000 Depreciation 346000 Total 1540000 Operating income for the first quarter of the coming year is projected to be $320,000. Crane is subject to a 40% tax rate. The company pays 100% of its estimated taxes in the month following the end of each quarter.Crane maintains a minimum cash balance of $50,000. If the cash balance is less than $50,000 at the end of the month, the company borrows against its 12% 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 is $50,000.Prepare the cash budget for the second quarter. (Round answers to 0 decimal places, e.g. 5,275. Enter answers in necessary fields only. Leave other fields blank. Do not enter 0.)

April May June Quarter

Beginning Cash balance $ $ $ $

Insurance Payments for inventory Utilities Income taxes Advertising Property taxes Wages Borrowings Salaries Collection from Sales Repayments Interest

Minimum cash balance Total financing disbursements Total cash disbursements Cash excess (deficiency) Cash excess (needed) Total cash available to spend

Add: Less: Cash excess (deficiency) Minimum cash balance Cash excess (needed) Total financing Total cash disbursements Total cash available to spend disbursements

Wages Insurance Borrowings Salaries Advertising Collection from Sales Interest Income taxes Property taxes Repayments Payments for inventory Utilities

Insurance Payments for inventory Utilities Wages Salaries Collection from Sales Advertising Property taxes Borrowings Repayments Income taxes Interest

Payments for inventory Interest Property taxes Income taxes Collection from Sales Advertising Wages Utilities Insurance Borrowings Repayments Salaries

Income taxes Repayments Wages Advertising Payments for inventory Insurance Borrowings Interest Property taxes Collection from Sales Utilities Salaries

Borrowings Insurance Utilities Income taxes Repayments Collection from Sales Interest Payments for inventory Wages Salaries Advertising Property taxes

Collection from Sales Interest Payments for inventory Income taxes Property taxes Advertising Utilities Salaries Insurance Wages Borrowings Repayments

Property taxes Borrowings Payments for inventory Interest Advertising Insurance Wages Salaries Repayments Collection from Sales Income taxes Utilities

Interest Income taxes Payments for inventory Advertising Borrowings Collection from Sales Wages Repayments Salaries Property taxes Insurance Utilities

Minimum cash balance Cash excess (deficiency) Cash excess (needed) Total financing Total cash available to spend disbursements Total cash disbursements

Cash excess (deficiency) Total financing Total cash available to spend Total cash disbursements disbursements Minimum cash balance Cash excess (needed)

Total cash disbursements Cash excess (needed) Total cash available to spend disbursements Cash excess (deficiency) Total financing Minimum cash balance

Total financing disbursements Total cash available to spend Cash excess (needed) Minimum cash balance Total cash disbursements Cash excess (deficiency)

Financing:

Property taxes Wages Salaries Advertising Insurance Utilities Borrowings Income taxes Repayments Interest Collection from Sales Payments for inventory

Repayments Advertising Interest Collection from Sales Utilities Income taxes Insurance Payments for inventory Borrowings Wages Salaries Property taxes

Borrowings Salaries Utilities Insurance Advertising Property taxes Interest Income taxes Repayments Collection from Sales Payments for inventory Wages

Cash excess (needed) Total financing Minimum cash balance Cash excess (deficiency) Total cash disbursements Total cash available to spend disbursements

Ending Cash Balance $ $ $ $