Schedule of Cash Receipts from Customers
					First	Second	Third	Fourth	Total
					Quarter	Quarter	Quarter	Quarter
Total sales					118550	148140	166140	184140	616970
					First	Second	Third	Fourth	Total
					Quarter	Quarter	Quarter	Quarter
Cash Receipts from Customers:
Accounts Receivable balance, December 31, 2018					20000				20000
1st Quarter, Cash sales (10%)					85050	36450			121500
1st Quarter, Credit sales (90%), 70% collected in 1st quarter
1st Quarter, Credit sales (90%), 30% collected in 2nd quarter
2nd Quarter, Cash sales (10%)
2nd Quarter, Credit sales (90%), 70% collected in 2nd quarter
2nd Quarter, Credit sales (90%), 30% collected in 3rd quarter
3rd Quarter, Cash sales (10%)
3rd Quarter, Credit sales (90%), 70% collected in 3rd quarter
3rd Quarter, Credit sales (90%), 30% collected in 4th quarter
4th Quarter, Cash sales (10%)
4th Quarter, Credit sales (90%), 70% collected in 4th quarter
Total cash receipts from customers					118550

The Gerard Tire Company manufactures racing tires for bicycles. Gerard sells tires for $90 each. Gerard is planning for the next year by developing a master budget by quarters. Gerard's balance sheet for December 31, 2018, follows: GERARD TIRE COMPANY Balance Sheet December 31, 2018 $ 91,000 Assets Current Assets: Cash $ 56,000 Accounts Receivable 20,000 Raw Materials Inventory 5,100 Finished Goods Inventory 9,900 Total Current Assets Property, Plant, and Equipment: Equipment 194,000 Less: Accumulated Depreciation (42,000) Total Assets Liabilities Current Liabilities: Accounts Payable Stockholders' Equity Common Stock, no par $ 120,000 Retained Earnings 115,000 Total Stockholders' Equity Total Liabilities and Stockholders' Equity 152,000 $ 243,000 $ 8,000 235,000 $ 243,000 Other data for Gerard Tire Company: a. Budgeted sales are 1,500 tires for the first quarter and expected to increase by 200 tires per quarter. Cash sales are expected to be 10% of total sales, with the remaining 90% of sales on account. b. Finished Goods Inventory on December 31, 2018, consists of 300 tires at $33 each. c. Desired ending Finished Goods Inventory is 30% of the next quarter's sales; first quarter sales for 2020 are expected to be 2,300 tires. FIFO inventory costing method is used. d. Raw Materials Inventory on December 31, 2018, consists of 600 pounds of rub- ber compound used to manufature the tires. e. Direct materials requirements are 2 pounds of a rubber compound per tire. The cost of the compound is $8.50 per pound. f. Desired ending Raw Materials Inventory is 40% of the next quarter's direct materials needed for production; desired ending inventory for December 31, 2019 is 600 pounds; indirect materials are insignificant and not considered for budgeting purposes. g. Each tire requires 0.4 hours of direct labor; direct labor costs average $12 per hour. h. Variable manufacturing overhead is $4 per tire. i. Fixed manufacturing overhead includes $6,000 per quarter in depreciation and $16,770 per quarter for other costs, such as utilities, insurance, and property taxes. j. Fixed selling and administrative expenses include $12,500 per quarter for salaries; $3,000 per quarter for rent; $450 per quarter for insurance; and $2,000 per quarter for depreciation. k. Variable selling and administrative expenses include supplies at 2% of sales. 1. Capital expenditures include $15,000 for new manufacturing equipment, to be purchased and paid in the first quarter. m. Cash receipts for sales on account are 70% in the quarter of the sale and 30% in the quarter following the sale; December 31, 2018, Accounts Receivable is received in the first quarter of 2019, uncollectible accounts are considered insignificant and not considered for budgeting purposes. n. Direct materials purchases are paid 60% in the quarter purchased and 40% in the following quarter, December 31, 2018, Accounts Payable is paid in the first quarter of 2019. 0. Direct labor, manufacturing overhead, and selling and administrative costs are paid in the quarter incurred. p. Income tax expense is projected at $1,500 per quarter and is paid in the quarter incurred. q. Gerard desires to maintain a minimum cash balance of $55,000 and borrows from the local bank as needed in increments of $1,000 at the beginning of the quarter; principal repayments are made at the beginning of the quarter when excess funds are available and in increments of $1,000; interest is 6% per year and paid at the beginning of the quarter based on the amount outstanding from the