Please correct the responses in RED Bonita Products a rapidl

Please correct the responses in RED.

Bonita Products, a rapidly growing distributor of home gardening equipment, is formulating its plans for the coming year. Carol Jones, the firm\'s marketing director, has completed the following sales forecast. Month Sales Month Sales anuary Februar March 904,300 July $1,002,600 August $1,503,900 $1,503,900 $904,300 September $1,610,000 $1,610,000 $1,254,900 November $1,503,900 June $1,405,100 December $1,700,100 $1,158,500 October pri May Phillip Smith, 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. Bonita\'s excellent record in accounts receivable collection is expected to continue, with 60% billings collected in the month after sale and the remaining 40% collected two months after the sale ·Cost of goods sold, Bonita\'s largest expense, 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. For example, in April, 30% of April cost of goods sold is purchased and 70% 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 $1,560,800 for the year. A breakdown o 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 Advertising Property taxes Insurance Utilities Depreciation Total $325,500 378,900 137,400 193,900 178,300 346,800 $1,560,800 Operating income for the first quarter of the coming year is projected to be $324,300. Bonita is subject to a 40% tax rate. The company pays 100% of its estimated taxes in the month following the end of each quarter Bonita 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 1296 line of credit in order to maintain the balance. All borrowings are made at the beginning of the month, and a repayments are made at the end of the month (in increments of $1,000). Accrued interest is paid in full with each principal repayment. The projected cash balance on April 1 is $59,200

Solution

Cash receipts Budget for the second Quarter April may June Total cash Receipts February Sales 401040 401040 march Sales 542580 361720 904300 April Sales 695100 463400 1158500 may sales 752940 752940 Totals 943620 1056820 1216340 3216780 Accounts receivables at the end of the second Quarter 1254900 Accounts receivables from may sales (40%)=$1254900*0.40 =$501,960 Accounts receivables from June Sales =1405100 Total Accouts recevable for the end of the second quarter =501960+1405100=$1907,060 Purchase budget for the Second Quarter April may June Total Purchases April COGS 139020 139020 May COGS 351372 150588 501960 June COGS 393428 168612 562040 July COGS 421092 421092 Total 490392 544016 589704 1624112 Prepare Cash payment budget for the second Quarter April may June Total Payments march Purchases 108224 108224 April purchases 367794 122598 490392 may Purchases 408012 136004 544016 (544016*25%) June purchases 442278 442278 (589704*75%) Total 476018 530610 578282 1584910 Accounts Payable at the end of the second Quarter Accounts Payable at the end of the second Quarter =25% of June Purchases =589704*25% =$147426 Cash Budget For the second Quarter April may June Total Beginning cash balance 59200 50806 110820 59200 Collection from sales 943620 1056820 1216340 3216780 Total cash Available to spend 1002820 1107626 1327160 3275980 less: Disbursements Wages (30% of Sales) 347550 376470 421530 1145550 (1158500*0.30) (1254900*0.30) (1405100*0.30) Salaries 27135 27135 27135 81405 Advertisemnet 31575 31575 31575 94725 property taxes 34350 34350 insurance 16158 16158 16158 48474 Utilitites 14858 14858 14858 44574 Income taxes 129720 129720 Payments for inventory 476018 530610 578282 1584910 Total cash Disbursements 1043014 996806 1123888 3163708 Cash Excess/(deficiency) -40194 110820 203272 112272 Minimum Cash balance 50000 50000 50000 50000 Cash Excess/(needed) -90194 60820 153272 62272 Financing Interest (91000*12%*2/12) -1820 -1820 Repayment -91000 -91000 Borrowing 91000 91000 Total Finance 91000 0 -92820 -1820 Ending cash balance 50806 110820 110452 110452