Answered step by step
Verified Expert Solution
Question
...
1 Approved Answer
need help please thank you Cullumber Products, a rapidly growing distributor of home gardening equipment, is formulating its plans for the coming year. James Smith,
need help please thank you
Cullumber Products, a rapidly growing distributor of home gardening equipment, is formulating its plans for the coming year. James Smith, the firm's marketing director, has completed the following sales forecast. Month January February March April Sales $920,000 $1,140,000 $920,000 $1.240,000 $870,000 $970,000 Month July August September October November December Sales $1.290,000 $1,500,000 $1,600,000 $1,600,000 $1,500,000 $1.700,000 May June Gary King 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 Cullumber's excellent record in accounts receivable collection is expected to continue, with 30% of billings collected in the month of sale, 60% of billings collected in the month after sale and the remaining 10% collected two months after the sale. Cost of goods sold. Cullumber's largest expense, is estimated to equal 45% of sales dollars. Forty percent of inventory is purchased one month prior to sale and 60% during the month of sale. For example, in April, 60% of April cost of goods sold is purchased and 40% 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 $1,437,000 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 Advertising Property taxes Insurance Utilities Depreciation Total 291,000 360,000 80,000 192,000 168,000 346,000 $ 1.437,000 Operating income for the first quarter of the coming year is projected to be $320,000. Cullumber is subject to a 40% tax rate. The company pays 100% of its estimated taxes in the month following the end of each quarter. Cullumber 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. (a) Your answer is correct Prepare the cash receipts budget for the second quarter. (Enter answers in necessary fields only. Leave other fields blank. Do not enter Oy Cash Receipts Budget May April June Total Cash Receipts 114000 $ 114000 552000 92000 844000 Co search Accounts Receivable balance at the end of second quarter 766000 eTextbook and Media Attempts: 2 of 3 used (b) Prepare the purchases budget for the second quarter. (Round answers to decimal places, eg. 5,275. Enter answers in necessary fields only. Leave other fields blank. Do not enter 0.) Purchases Budget May April June Total Purchas $ $ April COGS May COGS June COGS Search a g
need help please thank you
![image text in transcribed](https://s3.amazonaws.com/si.experts.images/answers/2024/07/668e185ab385d_378668e185a50c79.jpg)
![image text in transcribed](https://s3.amazonaws.com/si.experts.images/answers/2024/07/668e185b6cd93_379668e185b047ee.jpg)
![image text in transcribed](https://s3.amazonaws.com/si.experts.images/answers/2024/07/668e185c10779_379668e185b9fcc6.jpg)
![image text in transcribed](https://s3.amazonaws.com/si.experts.images/answers/2024/07/668e185c9ed1c_380668e185c3fa7c.jpg)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-text-image.webp)
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Step: 3
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started