Problem 4-21 Schedule of cash payments [LO4-2]

The Denver Corporation has forecast the following sales for the first seven months of the year:

January	$	27,000	May	$	27,000
February		29,000	June		33,000
March		31,000	July		35,000
April		37,000

Monthly material purchases are set equal to 25 percent of forecast sales for the next month. Of the total material costs, 30 percent are paid in the month of purchase and 70 percent in the following month. Labor costs will run $5,700 per month, and fixed overhead is $10,500 per month. Interest payments on the debt will be $4,700 for both March and June. Finally, the Denver salesforce will receive a 1.50 percent commission on total sales for the first six months of the year, to be paid on June 30.

Prepare a monthly summary of cash payments for the six-month period from January through June. (Note: Compute prior December purchases to help get total material payments for January.)