Penny and Leonard (P&L) Corp. is manufacturer. The following represents P&Ls monthly forecasts for 2020:

Month	Forecasted Sales		Month	Forecasted Sales
January	$ 9,000,000		July	$ 15,000,000
February	$ 10,000,000		August	$ 15,000,000
March	$ 9,000,000		September	$ 16,000,000
April	$ 11,500,000		October	$ 16,000,000
May	$ 12,500,000		November	$ 15,000,000
June	$ 14,000,000		December	$ 17,000,000

The following additional information is available:

• P&L expects to collect 40% of billings in the month after the sale and the remaining 60% two months after.
• Each month, cost of goods sold is estimated to be 40% of sales. Additionally, 70% of the required parts are received one month prior to sale and 30% is received in the month of sale.
• Historically, 75% of accounts payable has been paid one month after receipt of the purchased parts, and the remaining 25% has been paid two months after receipt.
• Hourly wages and fringe benefits, estimated to be 30% of the current months sales, are paid in the month incurred.
• General and administrative expenses are projected to be $15,550,000 for the year. The breakdown of the expenses is presented below. All cash expenditures are paid uniformly throughout the year, expect the property taxes, which are paid in four equal installments at the end of each quarter.

2020 Forecasted General and Administrative Costs
Sales and fringe benefits			$ 3,200,000
Promotion			$ 3,800,000
Property taxes			$ 1,350,000
Insurance			$ 2,000,000
Utilities			$ 1,800,000
Depreciation			$ 3,350,000

• Income tax payments are made at the beginning of each calendar quarter based on the income of the prior quarter. P&L is subject to a 40% tax rate. Operating income for the first quarter of 2020 is projected to be $3,000,000. The company pays 100% of the estimated tax payment.
• P&L maintains a minimum cash balance of $500,000. If the cash balance is less than $500,000 at the end of each month, the company borrows amounts necessary to maintain this balance. All amounts borrowed are repaid out of the subsequent positive cash flow. The projected April 1, 2020 opening balance is $500,000.
• There is no short-term debt as of April 1, 2020.
• P&L uses a calendar year for both financial reporting and tax purposes.

Required: Prepare a cash budget for P&L by month for the second quarter of 2020, ignoring any interest expense associated with borrowing.

2020 Forecasted General and Administrative Costs

Sales and fringe benefits

$ 3,200,000

Promotion

$ 3,800,000

Property taxes

$ 1,350,000

Insurance

$ 2,000,000

Utilities

$ 1,800,000

Depreciation

$ 3,350,000