Roller Catering is a distributor of catering equipment. The company is in the process of putting together its cash budget for the second quarter$-$April, May, and June of next year. The president of the company suspects that some financing will be required in the second quarter because sales are expanding and the company intends to make several major equipment purchases in that quarter. The president is confident that the company will be able to meet or exceed the following budgeted sales figures next year:

January $$158,000$ July $$190,000$

February $$160,000$ August $$192,000$

March $$164,000$ September $$210,000$

April $$172,000$ October $$230,000$

May $$176,000$ November $$260,000$

June $$184,000$ December $$180,000$

The following additional information will be used in formulating the cash budget:

A$)$ The company collects $30\%$ of its billings in the month after the sale and the remaining $70\%$ in the second month after the sale.

B$)$ The cost of sales is $75\%$ of sales. They order goods one month in advance of their expected sales.

C$)$ Desired ending inventory is kept to a minimum.

D$)$ Half of the purchases made are paid one month after it orders, and the other half paid $2$ month after it places the order.

E$)$ Operating expenses other that cost of sales are $$178,800$ for the year. It includes Salaries of $$120,000,$ advertising $$12,000,$ property taxes $$18,000,$ insurance $$4,800,$ utilities $$6,000,$ Depreciation $$18,000.$

F$)$ Income tax payments are made by the company in the first month of each quarter based on the taxable income for the prior quarter. The income tax payment due in April is $$16,000.$

G$)$ Because of expanding sales, the company plans to purchase $$22,300$ of equipment in April and $$29,000$ in May. These purchases will not affect depreciation for the year.

H$)$ The end of the month cash balance cannot fall below $$20,000.$

I$)$ All borrowing is done at the beginning of the month, and all investments and repayments are made at the end of the month. As of May $31$st$,$ there are no investments of excess cash and no outstanding loans.

J$)$ The annual rate on loans from the bank is $12\%.($or $1\%$ per month$).$ The company will pay off any loans, including accumulated interest, at the end of the second quarter if sufficient cash is available.

REQUIRED

Prepare a cash budget by month and in total for the second quarter.

$($Prepare first a purchase budget, payment for purchases, operating expense budget to be able to make the cash budget as shown on the handout on budgeting$)$