Problem 5-35 Coronado Products, completed the following sales forecast rapidly growing distributor of home gardening equipment, is formulating its plans for the coming year. Carol Jones, the firm's marketing director, has Month Sales Month Sales January July $1,501,600 $904,800 February $1,009,200 August $1,501,600 September March $1,602,400 $904,800 April $1,160,000 October $1,602,400 $1,257,400 November $1,501,600 May December June $1,401,000 $1,704,800 Phillip Smith, an accountant in the Planning and Budgeting Department, Iis responsible for preparing the cash flow projectlon. He has gathered the following Information All sales are made on credit. the month after sale and the remaining 40% Coronado's excellent record in accounts receivable collection is expected to continue, with 60% of billings collected collected two months after the sale. Cost of goods sold, Coronado's largest expense, is estimated to equal 40% of sales dollars. Seventy percent of inventory is purchased one month prior to sale and 30% during the month of sale. For example, in April, 30% of April cost of goods sold purchased and 70% of May cost of goods sold is purchased All purchases are made on account. Historically, 75% of accounts payable have been paid during the month of purchase, and the remaining 25% in the month following purchase. Hourly wages and fringe benefits, estimated at 30% of the current month's sales, are paid in the month incurred. General and administrative expenses are projected to be $1,575,600 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 326,900 Advertising 376,600 Property taxes 142,800 Insurance 196,200 Utilities 179,300 353,800 Depreclation Total 1,575,600 Operating income for the first quarter of the coming year is projected to be $321,400. Coronado is subject to a 40% tax rate. The company pays 100% of its estimated taxes in the month following the end of each quarter. .Coronado 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 aqainst its 12% 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 $57,700. Your answer is partially correct. Try again. 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 Total Cash Receipts April May June February sales 403680 403680 March sales 542880 361920 904800 April sales 464000 696000 1160000 May sales 754440 754440 946560 1057920 1218440 Totals 3222920 1903960 Accounts Recelvable balance at the end of second quarter of 2015 Your answer is partially correct. Try again 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 Total Purchases April May June 139200 April COGS May COGS 352072 150888 June COGS 392280 168120 July COGS 420448 491272 543168 Totals 588568 Your answen correct. 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 May June March 108344 purchases April purchases 368454 122818 May purchases 135792 407376 Ju purchases 441426 476798 530194 577218 147142 Accounts Payable balance at the end of second quarter of 2015 Prepare the cash 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 Budget April May June Quarter 50985 Beginning Cash balance 57700 111575 57700 Collection from Sales 946560 1057920 1218440 3222920 Total cash available to spend 1004260 1108905 3280620 133001 Less: disbursements Payments for inventory 476798 530194 577218 1584210 420300 Wages 348000 377220 1145520 Salaries 27242 27242 27242 81725 Advertising 31383 31383 31383 94150 35700 Property taxes 35700 16350 Insurance 16350 49050 16350 14942 Utilities 14942 14942 44825 Income taxes 128560 128560 1043275 Total cash disbursements 1123135 997331 3163740 Cash excess (deficiency) (39015) 206880 116880 111575 Minimum cash balance 50000 50000 50000 50000 89015 Cash excess (needed) 57877 156880 66880 Financing: 90000 Borrowings 90000 90000 (90000) Repayments 2700 2700 Interest (2700) 90000 (92700) Total financing 50985 111575 114180 114180 Ending Cash Balance P| W