Direct Equipment
Projected Revenues & Expenses
	June	July	August	September	October	November
Sales	85,000	86,275	87,569	88,883	90,216	91,569
Cost of Goods Sold	52,700	53,491	54,293	55,107	55,934	56,773
Gross Profit	32,300	32,785	33,276	33,775	34,282	34,796
Admin & Selling Costs	21,000	21,000	21,000	21,000	21,000	21,000
Net Income before Taxes	11,300	11,785	12,276	12,775	13,282	13,796
Information related to cash receipts
1) Cash sales are 80% and credit sales are 20% per month
2) Collections on credit sales are 60% in the month of sale and 40% in the following month
Information related to purchases of direct materials
1) Purchases of Direct Materials are 32% of Sales
2) Direct material purchases are paid 50% in current month and 50% in following month
3) Ending Inventory needs to be 30% of the following month's Direct Materials Cost of Goods Sold
4) Accounts payable for purchases of direct materials June 30 was $13,600
Information related to cash
1) Beginning Cash Balance June 30 was $175,000
2) Admin & Selling Costs include $1,000 depreciation expense
3) Admin & Sales salaries are $4,350 per month (included in total Admin and Selling Costs)
4) Direct wages are 30% of sales
5) Wages are paid 80% in current month and 20% the following month
6) A dividend to the owners of 10% of the ending quarter's Net Income (after tax) is paid in Jan, Apr, Jul, Oct
7) April - June Net Income before taxes was $50,000
8) Quarterly estimated taxes are paid the month following the end of the quarter
9) Effective tax rate is 23%.
10) Direct Equipment operates on a calendar year basis
Required - Prepare the following budgets for July - October
1) Cash Receipts
2) Production (direct material)
3) Cash disbursements for purchases of Direct Materials (use results of Production budget)
4) Cash