Month Sales Month Sales January $908,300 July $1,504,200 February $1,005,800 August $1,504,200 March $908,300 September $1,606,500 April $1,153,500 October $1,606,500 May $1,252,100 November $1,504,200 June $1,409,900 December $1,707,200 Phillip Smith, an accountant in the Planning and Budgeting Department, is responsible for preparing the cash ow projection. He has gathered the following information. . All sales are made on credit. - Vaughn'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. 0 Cost of goods sold, Vaughn'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. a 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. a Hourly wages and fringe benefits, estimated at 30% of the current month's sales, are paid in the month incurred. a General and administrative expenses are projected to be $1,561,000 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 installments at the end of each quarter. Salaries and fringe benefits $ 321,600 Advertising 373,600 Property taxes 141,700 Insurance 190,500 Utilities 180,800 Depreciation 352,800 Total $ 1,561,000 o Operating income for the first quarter of the coming year is projected to be $323,700. Vaughn is subject to a 40% tax rate. The company pays 100% of its estimated taxes in the month following the end of each quarter. - Vaughn 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 $51,500. Prepare the cash receipts budget for the second quarter. (Enter answers in necessary fields only. Leave other fields blank. Do not enter 0.) Cash Receipts Budget April May June Total Cash Receipts February sales $' $' $ $1 March sales | l l | l i i i i i May sales l l l l i .0... $1 $1 $ i .1 i Accounts Receivable balance at the end of second quarter of 2015 $ ' LINK TO TEXT LINK TO VIDEO Prepare the purchases 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.) Purchases Budget April May June Total purchases April COGS $l ' $ ' $l $17 May COGS ' l l l ' June cocs l l l l l July coes l l l l ' Totals $' ' $. ' $' $
