In the fourth quarter of 2020, 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 

Taxes on income....................................20,000 

Net income..........................................$ 80,000 

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

Estimated data for Casey Wholesalers, Inc. for 2021 are as follows: 

Taxes are 20 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 2021. 

Required 

Prepare a cash budget for each quarter of 2021.

Transcribed Image Text:

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