Sedona Gear Company, a rapidly growing distributor of camping equipment, is formulating its plans for the coming year.Cody Mosbay, the firm's marketing director, has completed the following sales forecast. $Sedona Gear Company, a rapidly growing distributor of camping equipment, is formulating its plans for the coming year.Cody Mosbay, the firm's marketing director, has completed the following sales forecast. Patti Bodkin, an accountant in the Planning and Budgeting Department, is responsible for preparing the cash flow projection.She has gathered the following information. \bullet All sales are made on credit. \bullet Sedona's excellent record in accounts receivable collection is expected to continue, with 65 percent of billings collected in the month after sale and the remaining 35 percent collected in the second month after the sale. \bullet Cost of goods sold, Sedona's largest expense, is estimated to equal 45 percent of sales dollars.Seventy percent of inventory is purchased one month prior to sale and 30 percent during the month of sale.For example, in April, 30 percent of April cost of goods sold is purchased and 70 percent of May cost of goods sold is purchased. \bullet All purchases are made on account.Historically, 70 percent of accounts payable have been paid during the month of purchase, and the remaining 30 percent in the month following purchase. Required: a.Prepare the cash receipts budget for the second quarter.Omit the heading. b.Prepare the purchases budget for the second quarter.Omit the heading. c.Prepare the cash payments budget for the second quarter.Omit the heading.$ Patti Bodkin, an accountant in the Planning and Budgeting Department, is responsible for preparing the cash flow projection.She has gathered the following information.

\bullet

All sales are made on credit.

\bullet

Sedona's excellent record in accounts receivable collection is expected to continue, with 65 percent of billings collected in the month after sale and the remaining 35 percent collected in the second month after the sale.

\bullet

Cost of goods sold, Sedona's largest expense, is estimated to equal 45 percent of sales dollars.Seventy percent of inventory is purchased one month prior to sale and 30 percent during the month of sale.For example, in April, 30 percent of April cost of goods sold is purchased and 70 percent of May cost of goods sold is purchased.

\bullet

All purchases are made on account.Historically, 70 percent of accounts payable have been paid during the month of purchase, and the remaining 30 percent in the month following purchase.
Required:
a.Prepare the cash receipts budget for the second quarter.Omit the heading.
b.Prepare the purchases budget for the second quarter.Omit the heading.
c.Prepare the cash payments budget for the second quarter.Omit the heading.

Rowen Company Pays 80% of Its Expenses in the Month

Multiple Choice

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