Helpppppppp

*Problem 5-35 Marigold Products, a rapidly growing distributor of home gardening equipment, is formulating its plans for the coming year. Carol Jones, the firm's marketing director, has completed the following sales forecast. Month January February March April May June Sales $907,500 $1,004,000 $907,500 $1,158,500 $1,251,000 $1,400,500 Month July August September October November December Sales $1,507,500 $1,507,500 $1,609,100 $1,609,100 $1,507,500 $1,703,300 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. Marigold's 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, Marigold's 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 month's sales, are paid in the month incurred. . General and administrative expenses are projected to be $1,566,800 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 installments at the end of each quarter. Salaries and fringe benefits Advertising Property taxes Insurance Utilities Depreciation Total $ 322,400 375,800 136,800 197,600 184,300 349,900 $ 1,566,800 Operating income for the first quarter of the coming year is projected to be $324,300. Marigold is subject to a 40% tax rate. The company pays 100% of its estimated taxes in the month following the end of each quarter. . Marigold 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 $57,700. Prepare the cash budget for the second quarter. (Round answers to U decimal places, e.g. 5,275. Enter ans fields only. Leave other fields blank. Do not enter 0.) Cash Budget May April June Quarter Beginning Cash balance $157,700 51,226 $50,197 $157,700 51946100 Collection from Sales 946100 91058100 2 0581 $50,197 7214000 1264197 $157,700 3 218200 3275900 Total cash available to spend 1,003,800 $1,109,326 Less: Total cash disburseme Payments for inventory 7475295 1529020 7578185 T1582500 2 TWages 7347550 1375300 7420150 T1143000 Salaries 726867 726867 726867) 780601 731317) 1313171 T93951) 2 734200 TAdvertising Property taxes Insurance TUtilities Income taxes 749401 416467 15358 416467 15358 115358 15358 15358 T46074 T129720 (129720 TTotal cash disbursements ($1,042,574) ($994,329) ($1,122,544) ($3,159,447) TCash excess (deficiency) T $38,7 $114,997 141,653 116,453 Minimum cash balance 60,000 $60,000 960,00 8,774) Cash excess (needed) Financing: Borrowings 90,000 90,000 Interest 11800 2070 Repayments 63,000 90,000 [Total financing 90000 ($64,800) $2070) Ending Cash Balance 151,226 .150,197 ,114,383 .114,383