Problem 07-23A 1a. Schedule of expected cash collections: Year 2 Quarter Third Fourth Second Year 1-Fourth quarter sales: Year 2 - First quarter sales: Year 2-Second quarter sales: Year 2- Third quarter sales: Year 2 - Fourth quarter sales: Total cash collections b. Schedule of budgeted cash disbursements for merchandise purchases: Year 2 Quarter Second Third Fourth Year 1 - Fourth quarter purchases: Year 2- First quarter purchases: Year 2- Second quarter purchases: Year 2 - Third quarter purchases: Year 2-Fourth quarter purchases: Total cash disbursements 2.02:000 Year 2 Quarter Budgeted sales Variable expense rate Variable expenses Fixed expenses Total expenses Less depreciation Cash disbursements Year 2 Quarter Cash balance, beginning Add collections from sales Total cash available Less disbursements: Operating expenses Dividends Land Total disbursements Excess (deficiency) of receipts over disbursements Repayments Total financing Cash balance, ending Given Data P07-23A Budgeted Sales and Merchandise Purchases: Merchandise Purchases Sales Year 1 Fourth quarter actual Year 2 $ 300,000 180,000 First quarter estimatecd $ 400,000 260,000 Second quarter estimated 500,000 $ 310,000 Third quarter estimated600,000 S 370,000 Fourth quarter estimated S 480,000 240,000 Additional information: Percentage of sales collected in same quarter Percentage of sales collected in quarter following sales Percentage of sales deemed uncollectible Percentage of merchandise purchases paid in same quarter Percentage of merchandise purchases pain in following quarter Budgeted quarterly operating expenses for Year 2 33% 65% 2% -20% , 80% $90,000 plus percentage of sales Amount of depreciation budgeted each quarter Dividends to be paid each quarter 12% $ 20,000 S10,000 $80,000 $ 48,500 $ 20,000 $18,000 $ 10,000 sh purchase of land in second quarter Cash purchase of land in third quarter ash account balance at end of Year 1 Minimum cash balance required Bank loan borrowing increments laximum loan balance allowed terest rate per month on bank loans urrent outstanding loan balance $ 100,000 1.0%