Pharoah Products, a rapidly growing distributor of home gardening equipment, is formulating its plans for the coming year. Steven Garcia, the firm's marketing director, has completed the following sales forecast. Month Sales Month Sales January $

$9$

$0$

$0$

$,$

$0$

$0$

$0$

$$July $

$1$

$,$

$1$

$5$

$0$

$,$

$0$

$0$

$0$

$$February $

$1$

$,$

$0$

$0$

$0$

$,$

$0$

$0$

$0$

$$August $

$1$

$,$

$5$

$0$

$0$

$,$

$0$

$0$

$0$

$$March $

$9$

$0$

$0$

$,$

$0$

$0$

$0$

$$September $

$1$

$,$

$6$

$0$

$0$

$,$

$0$

$0$

$0$

$$April $

$1$

$,$

$1$

$0$

$0$

$,$

$0$

$0$

$0$

$$October $

$1$

$,$

$6$

$0$

$0$

$,$

$0$

$0$

$0$

$$May $

$8$

$5$

$0$

$,$

$0$

$0$

$0$

$$November $

$1$

$,$

$5$

$0$

$0$

$,$

$0$

$0$

$0$

$$June $

$9$

$5$

$0$

$,$

$0$

$0$

$0$

$$December $

$1$

$,$

$7$

$0$

$0$

$,$

$0$

$0$

$0$

$$Kenneth Clark, 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. Pharoah's excellent record in accounts receivable collection is expected to continue, with

$3$

$0$

$\%$

$$of billings collected in the month of sale,

$6$

$0$

$\%$

$$of billings collected in the month after sale and the remaining

$1$

$0$

$\%$

$$collected two months after the sale.

$.$

$$Cost of goods sold, Pharoah's largest expense, is estimated to equal

$4$

$5$

$\%$

$$of sales dollars. Forty percent of inventory is purchased one month prior to sale and

$6$

$0$

$\%$

$$during the month of sale. For example, in April,

$6$

$0$

$\%$

$$of April cost of goods sold is purchased and

$4$

$0$

$\%$

$$of May cost of goods sold is purchased. All purchases are made on account. Historically,

$7$

$5$

$\%$

$$of accounts payable have been paid during the month of purchase, and the remaining

$2$

$5$

$\%$

$$in the month following purchase. Hourly wages and fringe benefits, estimated at

$3$

$0$

$\%$

$$of the current month's sales, are paid in the month incurred. O General and administrative expenses are projected to be $

$1$

$,$

$4$

$4$

$9$

$,$

$0$

$0$

$0$

$$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 $

$3$

$0$

$0$

$,$

$0$

$0$

$0$

$$Advertising

$3$

$8$

$7$

$,$

$0$

$0$

$0$

$$Property taxes

$8$

$0$

$,$

$0$

$0$

$0$

$$Insurance

$1$

$9$

$2$

$,$

$0$

$0$

$0$

$$Utilities

$1$

$4$

$4$

$,$

$0$

$0$

$0$

$$Depreciation

$3$

$4$

$6$

$,$

$0$

$0$

$0$

$$Total $

$1$

$,$

$4$

$4$

$9$

$,$

$0$

$0$

$0$

$.$

$$Operating income for the first quarter of the coming year is projected to be $

$3$

$2$

$0$

$,$

$0$

$0$

$0$

$.$

$$Pharoah is subject to a

$4$

$0$

$\%$

$$tax rate. The company pays

$1$

$0$

$0$

$\%$

$$of its estimated taxes in the month following the end of each quarter. Pharoah maintains a minimum cash balance of $

$5$

$0$

$,$

$0$

$0$

$0$

$.$

$$If the cash balance is less than $

$5$

$0$

$,$

$0$

$0$

$0$

$$at the end of the month, the company borrows against its

$1$

$2$

$\%$

$$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 $

$1$

$,$

$0$

$0$

$0$

$)$

$.$

$$Accrued interest is paid in full with each principal repayment. The projected cash balance on April

$1$

$$is $

$5$

$0$

$,$

$0$

$0$

$0$

$.$

$$Prepare the cash receipts budget for the second quarter.