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 Financing Borrowings $ $ $ $ Repayments $ $ $ $ Interest $ $ $ $ Total financing $ $ $ $ Ending Cash Balance $ $ $ $

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Posted on Jul 10, 2024

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

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.