On April 30, Sterling Enterprises had an inventory of 38,000 units of finished goods, and it Objs. 2, 3 had accounts receivable totaling \(\$ 85,000\). Sales, in units, have been budgeted as follows for the next four months:

Sterling has a policy that \(40 \%\) of the following month's sales should be maintained in ending inventory. Each unit sells for \(\$ 2\). All sales are on account. The budgeted cash collections anticipate that one-third of sales will be collected in the month of sale and the remainder in the following month.

a. Prepare a production budget for the months of May, June, and July.

b. Prepare a schedule of cash collections for the months of May, June, and July.

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May 60,000 June 75,000 July 90,000 August 81,000