Mayne Manufacturing Co. has incurred substantial losses for several years and has become insolvent. On March 31, 20A, Mayne petitioned the court for protection from creditors and submitted the following balance sheet:

Mayne's management informed the court that the company has developed a new product, and that a prospective customer is willing to sign a contract for the purchase of 10,000 units of this product during the year ending March 31, 20B; 12,000 units during the year ending March 31, 20C; and 15,000 units during the year ending March 31, 20D, at a price of $90 per unit. This product can be manufactured using Mayne's present facilities. Monthly production with immediate delivery is expected to be uniform within each year. Receivables are expected to be collected during the calendar month following sales. Unit production costs of the new product are expected to be as follows:
Direct materials .................................$20
Direct labor ...................................... 30
Variable overhead .............................. 10
Fixed costs (excluding depreciation) will amount to $130,000 per year. Purchases of direct materials will be paid during the calendar month following purchase. Fixed costs direct labor, and variable overhead will be paid as incurred. Inventory of direct materials will be equal to 60 days' usage. After the first month of operations, 30 days' usage of direct materials will be ordered each month.
The general creditors have agreed to reduce their total claims to 60% of their March 31, 20A balances, under the following conditions:
(a) Existing accounts receivable and inventories are to be liquidated immediately, with the proceeds turned over to the general creditors.
(b) The balance of reduced accounts payable is to be paid as cash is generated from future operations, but in no event later than March 31, 20C. No interest will be paid on these obligations.
Under this proposed plan, the general creditors would receive $110,000 more than the current liquidation value of Mayne's assets.
Required:
Ignoring any need to borrow and repay short-term funds for working capital purposes, prepare a cash budget for the years ending March 31, 20B and 20C. On the budget, show the amount expected to be available to pay claims of general creditors. Also show amounts of payments to general creditors and the amount of cash remaining.

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Mayne Manufacturing Co. Balance Sheet March 31, 20A Net Book Liquidation Value Value Assets Accounts receivable $100,000 50,000 90,000 40,000 Plant and equipment150,000 160,00 Total 5340 000 250,000 Liabilities and Stockholders' Equity Accounts Common stock outstanding Deficit $600,000 60,000 (320,000 340.000 payable general creditors Total