Help Sav Garden Sales, Inc., sells garden supplies. Management is planning its cash needs for the second quarter. The company usually has to borrow money during this quarter to support peak sales of lawn care equipment, which occur during May. The following information has been assembled to assist in preparing a cash budget for the quarter a. Budgeted monthly absorption costing income statements for April-July are: 610,000 $1,110,000 $570,000 470,000 427.000777,000 399,000 329,000 333.000 171,000 141,000 Cost of goods sold in 183.000 47,000 113,000 48.500 161,500 106,000 65.600 68,000 42,200 45,000 s21,500 $ 161,400 $ 60,800 49,000 Includes $29,000 of depreciation each month b. Sales are 20% for cash and 80% on account. C. Sales on account are collected over a three-month period with 10% collected in the month of sale: 70% collected in the first month following the month of sale and the remaining 20% collected in the second month following the month of safe. February's sales totaled $265,000, and March's sales totaled $280,000 inventory purchases are paid for within 15 days. Therefore, 50% of a month's inventory purchases are paid for in the month of purchase. The remaining 50% is paid in the following month. Accounts payable at March 31 for inventory purchases during March total $121,100. e Each months ending inventory must equal 20% of the cost of the merchandise to be sold in the following month. The merchandise inventory at March 31 is $85,400 f Dividends of $36,000 will be declared and paid in April. gLand costing $44,000 will be purchased for cash in May. h. The cash balance at March 31 is $58,000; the company must maintain a cash balance of at least $40,000 at the end of each month. Prev 1 of 1 | Next