Sunland Products, a rapidly growing distributor of home gardening equipment, is formulating its plans for the coming year. Joseph Moore, the firm's marketing director, has completed the following sales forecast. Month Sales Month Sales January $920,000 July $1,170,000 February $1,020,000 August $1,500,000 March $920,000 September $1,600,000 April $1,120,000 October $1,600,000 4 May $870,000 November $1,500,000 June $970,000 December $1,700,000 Charles Wilson, 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. Sunland's excellent record in accounts receivable collection is expected to continue, with 30% of billings collected in the month of sale, 60% of billings collected in the month after sale and the remaining 10% collected two months after the sale. Cost of goods sold, Sunland's largest expense, is estimated to equal 45% of sales dollars. Forty percent of inventory is purchased one month prior to sale and 60% during the month of sale. For example, in April, 60% of April cost of goods sold is purchased and 40% 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 purchase, 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 month incurred. General and administrative expenses are projected to be $1,473,000 for the year. A breakdown of the expenses follows. All expenditures are paid monthly throughout the year, with the exception of property taxes, which are paid in four equal installments at the end of each quarter. Salaries and fringe benefits $ 318,000 Advertising 381,000 Property taxes 80,000 Insurance 192,000 Utilities 156,000 Depreciation: Total 346,000 $ 1,473,000 Operating income for the first quarter of the coming year is projected to be $320,000. Sunland is subject to a 40% tax rate. The company pays 100% of its estimated taxes in the month following the end of each quarter. Sunland maintains a minimum cash balance of $50,000. If the cash balance is less than $50,000 at the end of the month, the Prepare the cash receipts budget for the second quarter. (Enter answers in necessary fields only. Leave other fields blank. Do not enter 0.) April 102000 Cash Receipts Budget May June Total Cash Receipts 102000 552000 92000 644000 336000 672000 112000 1120000 990000 261000 522000 783000 291000 291000 1025000 925000 2940000 Accounts Receivable balance at the end of second quarter 766000 Chapter 5 Homework Question 2 of 2 < > 2.5/5 April Purchases Budget May June April $ 302400 COGS May COGS 156600 234900 lune COGS 174400 261900 July COGS 210600 Fotals $ 45000 409500 472500 - Chapter 5 Homework Question 2 of 2 < > 2.5/5 Prepare the cash payments budget for the second quarter. (Round answers to O decimal places, e.g. 5,275. Enter answers in necessary fields only. Leave other fields blank. Do not enter O.) Cash Payments Budget April March purchases April purchases May purchases June purchases Totals EA May 6A June