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director, has completed the following sales forecast 12,se0 September 40 percent two months after month after the sale, and the r . The of sale 30 percent has been paid two months after receipt Hourly wages and fringe benefits, estimated to be 30 percent of the current months sales, are paid in the month incurred. . in the following at the end of each quarter 2, see 1,600
subject to an income-tax rate of 40 percent. Alpha-Techs operating income for the first quarter of 20x5 is projected to be $3,100,000. The company pays 100 percent of the estimated tax payment Alpha-Tech maintains a minimum cash balance of $520,000. If the cash balance is less than $520,000 at the end of each month, the company borrows amounts necessary to maintain this balance. All amounts borrowed are repaid out of the subsequent positive cash flow. The projected April 1, 20x5, opening balance is $520,000. . Alpha-Tech has no short-term debt as of April 1, 20x5 . Alpha-Tech uses a calendar year for both financial reporting and tax purposes. ped Required: 1 Prepare a cash budget for Alpha-Tech by month for the second quarter of 20x5. For simplicity, ignore any interest expense associated with borrowing. (Negative amounts should be indicated by a minus sign.) Cash Budget For the Second Quarter of 20x5 ary sales March sales April sales Total receipts Accounts payable
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ALPHA-TECH Cash Budget For the Second Quarter of 20x5 76 78 79 80 81 82 83 84 85 86 87 April 520,000 May 20,0001,402,000 June Beginning balance Collections February sales March sales April sales May sales Total receipts Total cash available Disbursements Accounts payable Wages 30% of sales General and administrative Property taxes Income taxes Total disbursements Cash balance Cash borrowed Cash repaid Ending balance 3,400,000 4,500,000 3,000,000 6,000,000 4,000,000 4,400,000 8,400,000 9,802,000 7,900,000 8,420,000 9,000,000 9,520,000 89 90 91 92 93 94 95 96 97 98 3,085,250 3,000,000 900,000 3,592,750 3,300,000 900,000 4,075,750 3,750,000 900,000 340,000 1,240,000 8,225,250 194,750 325,250 7,792,750 1,727,250 9,065,750 736,250 (325,250) 1,402,000 520,000 736,250100 101 102 103 104 105 106 107 108 109 110 Supporting Calculations Accounts Payable -Parts received; Cost of Goods sold Month February March May June 35% of Sales 2,975,000 2,625,000 2,625,000 3,500,000 3,500,000 3,850,000 3,850,000 4,375,000 Timing April February March March 892,500 70% 1,837,500 787,500 2,450,000 70% 1,050,000 2,695,000 May Ma 112 113 114 115 116 1,155,000 3,062,500 4,217,500 2,730,000 3,237,500 3,745,000 Payments February March March 118 119 120 121 122 123 124 2,730,000 3,237,500 3,237,500 3,745,000 3,745,000 4,217,500 819,000 2,266,250 971,250 2,621,500 April May Total Payments 1,123,500 2,952,250 4,075,750 3,085,250 3,592,750

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