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In the fourth quarter of 2011, Eurofit Cycling, a bike shop, had the following Net Income

In the fourth quarter of 2011, Eurofit Cycling, a bike shop, had the following Net Income
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In the fourth quarter of 2011, Eurofit Cycling, a bike shop, had the following Net Income: Sales$350,000 Less cost of sales 140,000 Gross margin 210,000 Selling and administration65,000 Income before taxes145,000 . Income taxes50,750 Net income $ 94,250 Purchases in the fourth quarter amounted to $180,000. Estimated data for Eurofit Cycling for 2012 are as follows: Quarter 1 Quarter 2 Quarter 3 Quarter 4 Sales $425,000 $475,000 $550,000 $575,000 Cost of sales 170,000 190,000 220,000 230,000 Purchases 175,000 200,000 225,000 232,000 Selling and administration 67,000 69,000 71,000 73,000 Taxes are 35 percent of pretax income. Fifty percent of sales are collected in the quarter of sale and 50 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 $7,000 of depreciation included in selling and administrative expense. A capital expenditure for $20,000 is planned for the fourth quarter of 2012. Required Prepare a cash budget for each quarter of 2012. NOTE: This question is NOT our property; we are only suggesting solution of this question.

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