Sales forecast

Month		Sales		Month		Sales
January		$908,300		July		$1,504,200
February		$1,005,800		August		$1,504,200
March		$908,300		September		$1,606,500
April		$1,153,500		October		$1,606,500
May		$1,252,100		November		$1,504,200
June		$1,409,900		December		$1,707,200

Cash Flow Projection

	All sales are made on credit.
	60% of billings collected in the month after sale and the remaining 40% collected two months after the sale.
	Cost of goods sold 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.
	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 months sales, are paid in the month incurred.
	General and admin expenses are projected to be $1,561,000 for the year. All expenditures paid monthly throughout year, w/ the exception of property taxes, paid in 4 equal payments end of each quarter.

Salaries and fringe benefits		$	321,600
Advertising			373,600
Property taxes			141,700
Insurance			190,500
Utilities			180,800
Depreciation			352,800
Total		$	1,561,000

Operating income for the first quarter of the coming year is projected to be $323,700. Vaughn is subject to a 40% tax rate. The company pays 100% of its estimated taxes in the month following the end of each quarter.

Vaughn 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 against 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. Projected cash balance April 1 = $51,500.

Prepare the cash budget for the second quarter.

Cash Budget
	April	May	June	Quarter
Beginning Cash balance	$	$	$	$
Collection from Sales	$	$	$	$
Total cash available to spend	$	$	$	$
Less disbursements				$
Payments for inventory	$	$	$	$
Wages	$	$	$	$
Salaries	$	$	$	$
Advertising	$	$	$	$
Property taxes	$	$	$	$
Insurance	$	$	$	$
Utilities	$	$	$	$
Income taxes	$	$	$	$
Total cash disbursements	$	$	$	$
Cash excess (deficiency)	$	$	$	$
Minimum cash balance	$	$	$	$
Cash excess (needed)	$	$	$	$