(b) What part of the master budget uses the information you calculated in Req (a)? Problem #2 (34 points) Company DEF is a merchandising company that sells books. The company is working on its budget for the first quarter and has provided the following data regarding its operations: (c) What is the budgeted accounts receivable balance at the end of February? The actual sales in December were $300,000. Sales are budgeted at S160,000 for January $190,000 for February, $200,000 for March, and $155.000 for April Sales are 25% in cash and 75% on credit. Each month's credit sales are collected 30% in the month of sale and 70% in the month following the sale. The accounts receivable balance at December 31", all of which is expected to be collected in January, is SIS7,500 The cost of goods sold is 40% of sales. The company desires to have an ending merchandise inventory account balance at the end of each month equal to 10% of the next month's cost of goods sold. On December 31, the merchandise inventory account balance is $6,400. Required (show all work): (a) Calculate the total expected cash collections in the month of February. (d) Using the data provided on the previous page and the form below, prepare a merchandise purchases budget (in dollars) for each month from January through March and for the first quarter in total. Company DEF Merchandise Purchases Budget January February March