Prepare the cash payments budget for the second quarter.

*Problem 535 (Part Level Submission) GrowMaster 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 Sales $909,900 $1,007,900 $909,900 Month Sales July $1,507,400 August $1,507,400 September $1,606,300 April $1,156,800 October $1,606,300 May $1,259,900 November $1,507,400 June $1,405,100 December $1,706,700 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. GrowMaster's excellent record in accounts receivable collection is expected to continue, with 60 percent of billings collected in the month after sale and the remaining 40 percent collected two months after the sale. Cost of goods sold, GrowMaster's largest expense, is estimated to equal 40 percent of sales dollars. Seventy percent of inventory is purchased one month prior to sale and 30 percent during the month of sale. For example, in April, 30 percent of April cost of goods sold is purchased and 70 percent of May cost of goods sold is purchased. All purchases are made on account. Historically, 75 percent of accounts payable have been paid during the month of purchase, and the remaining 25 percent in the month following purchase. Hourly wages and fringe benefits, estimated at 30 percent of the current month's sales, are paid in the month incurred. General and administrative expenses are projected to be $1,567,400 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 $ 320,300 Advertising 378,100 Property taxes 141,100 Insurance 197,600 Utilities 181,200 Depreciation 349,100 Total $ 1,567,400 Operating income for the first quarter of the coming year is projected to be $322,300. GrowMaster is subject to a 40 percent tax rate. The company pays 100 percent of its estimated taxes in the month following the end of each quarter. GrowMaster 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 percent 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 $56,600. *(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 0.) Cash Receipts Budget April May June February sales $ 403160 $ $ March sales 545940 363960 April sales 694080 462720 May sales 755940 $ 949100 $ 1058040 $ 1218660 Totals Accounts Receivable balance at the end of second quarter of 2012 $ 1909060 Attempts: 1 of 2 used *(b) Your answer is correct. 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 $ 138816 $ $ May COGS 352772 151188 June COGS 393428 168612 July COGS 422072 Totals $ $ $ April COGS 491588 544616 590684 Attempts: 1 of 2 used *(c) Prepare the cash payments 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.) Cash Payments Budget April March purchases April purchases May purchases June purchases May June $ $ $ $ $ $ Accounts Payable balance at the end of second quarter of 2012 $