The Coffee Specialist Corporation approached you to compile a cash disbursement schedule for the months of March, April, and May. Use the following information and Table 4.9 as a guide to prepare this schedule. Sales: January = $520,000; February = $540,000; March = $550,000; April = $600,000; May = $660,000; June = $670,000 Purchases: Purchases are calculated as 70% of the following month’s sales, 50% of purchases are made in cash, 30% of purchases are settled one month after purchase, and the remaining 20% of purchases are settled two months after purchase. Rent: The firm pays rent of $9,500 per month. Wages and salaries: The fixed wage and salary costs are $7,500 per month plus a variable cost of 6.5% of the current month’s sales. Taxes: The tax bill to be paid in May amounts to $57,500. Fixed asset outlays: New equipment will be acquired during March at a cost of $85,000. Interest payments: An amount of $32,000 for interest is due in March. Cash dividends: Dividends of $15,000 will be paid in April.

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TABLE 4.9 A Schedule of Projected Cash Disbursements for Coulson Industries ($000) Purchases (0.70 × sales) Cash purchases (0.10) Payments of A/P: Lagged 1 month (0.70) Lagged 2 months (0.20) Rent payments Wages and salaries Tax payments Fixed-asset outlays Interest payments Cash dividend payments Principal payments Total cash disbursements Aug. $70 $7 Sept. $140 $14 49 $63 Oct. $280 $ 28 98 14 5 48 20 $213 Nov. $210 $21 196 28 5 38 130 $418 Dec. $140 $14 147 56 5 28 25 10 20 $305