Reference no: EM131755597

Question One:  In the fourth quarter of 2014,Casey Wholesalers had the following net income:

Sales                                         $650,000

Less cost of sales                       300,000

Gross margin                             350,000

Selling and administration         250,000

Income before taxes                 100,000

Income taxes                              35,000

Net income                              $ 65,000

Purchases in the fourth quarter amounted to $375,000.

Estimated data for Casey Wholesalers,Inc.for 2015 are as follows:
                                                   Quarter 1     Quarter 2      Quarter 3       Quarter 4

Sales                                         $725,000     $805,000       $875,000       $968,000

Cost of sales                               350,000       420,000         500,000         580,000

Purchases                                  410,000       450,000         525,000         600,000

Selling and administration         250,000          250,000         250,000      250,000

Taxes are 35 percent of pretax income and are paid in the quarter incurred.Sixty percent of sales are collected in the quarter of sale and 40 percent are collected in the next quarter.Eighty percent of purchases are paid in the quarter of purchase and 20 percent are paid in the next quarter.Selling and administrative expenses are paid in the quarter incurred except for $10,000 of depreciation included in selling and administrative expense. A capital expenditure for $75,000 is planned for the fourth quarter of 2015.

Required

Prepare a cash budget for each quarter of 2015.