Problem 5-35 Sheffield Products, a rapidly growing distributor of home gardening equipment, is formulating its plans for the co year. Carol Jones, the firm's marketing director, has completed the following sales forecast Month Sales Month Sales January $908,200 July $1,502,500 February $1,006,200 August $1,502,500 March $1,605,300 $908,200 September April $1,151,400 October $1,605,300 May $1,257,900 November $1,502,500 $1,406,800 June December $1,700,400 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. Sheffield's excellent record in accounts receivable collection is expected to continue, with 60 % of billings collec month after sale and the remaining 40% collected two months after the sale Cost of goods sold, Sheffield's largest expense, is estimated to equal 40 % of sales dollars. Seventy percent of i is purchased one month prior to sale and 30 % during the month of sale. For example, in April, 30 % of April cos goods sold is 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 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 manth incurre General and administrative expenses are projected to be $1,562,000 for the year. A breakdown of the expense All expenditures are paid monthly throughout the year, with the exception of property taxes, which are paid in equal installments at the end of each quarter. Salaries and fringe benefits 321,100 374,400 Advertising 143,600 Property taxes Insurance 193,500 Utilities 181,100 Depreciation 348,300 Total 1,562,000 Operating income for the first quarter of the coming year is projected to be $329,200. Sheffield is subject to a rate. The company pays 100% of its estimated taxes in the month following the end of each quarter Sheffield maintains a minimum cash balance of $50,000. If the cash balance is less than $50,000 at the end of month, the company borrows against its 12% line of credit in order to maintain the balance. All borrowings are the beginning of the month, and all repayments are made at the end of the month (in increments of $1,0o0). A interest is paid in full with each principal repayment. The projected cash balance on April 1 is $58,100 Your answer is partially correct. Try again Prepare the cash receipts budget for the second quarter. (Enter answers in necessary fields only. Leave oth blank. Do not enter 0.) Cash Receipts Budget June Total Cash Receipts April May 802480 February sales $402480 1544920 March sales 363280 908200 April sales 460960 1151400 C 1690840 754740 May sales 1754740 C x 908200 1093320 1118020 3119540 Totals 1909960 Accounts Receivable balance at the end of second quarter of 2015