Allan Corporation has the following sales budget for March of $440,000. About 10 percent are cash sales and the remainder is sold on account. The company expects that 60 percent of credit sales will be collected in the month of the sale, 25 percent in the next month and 10 percent in the following month. Materials purchased on account are expected to be $250,000. Allan pays 35 percent in the month of the purchase, 50 percent in the month following the purchase and the remaining 15 percent in the second month after the purchase. Salaries and wages of the workers are approximately $45,000 per month. The employees are paid weekly so on average 95 percent of their wages are paid in the month to which they relate and the remaining 5 percent is paid in the following month. Utilities average $4,300 per month. Rent on the building is $9,000 per month. Insurance is $3,000 per month and advertising costs are $1,000 per month. February sales were $320,000 and purchases of materials in February were $170,000; January sales were $200,000 and purchases of materials in January were $130,000. The cash balance on March 1st is $5,400.

Required:

A. Prepare a schedule of cash receipts

Allan Corporation
Schedule of Cash Receipts
Cash receipts for March
January collection
February collection
March cash sales
March accounts receivable sales
Total cash collections

B. Prepare a schedule of cash payments (Accounts payable payments)

Allan Corporation
Schedule of Cash Payments
Cash disbursements for March
January payment
February payment
March payment
Total cash disbursements

C. Prepare a cash budget

Allan Corporation
Cash Budget
Less: disbursements:
Payments for:
Total disbursements
Ending cash balance