Dryden Industries, a wholesale company, is considering whether to open a new distribution center. The center would open on October 1, 2022. To make the decision, the planning committee requires a master budget (Sales, Purchases, Selling & Admin, Cash) for the center's first quarter of operation (October, November, and December of 2022). Required

Construct the first quarter master budget based on the following expectations:

a. October sales are estimated to be $600,000 of which $120,000 will be cash sales and $480,000 will be on credit. The company expects sales to grow 8% per month for the first few months of operation. Prepare a sales budget for the first quarter.

b. The company expects to collect 25% of accounts receivable in the month of sale and 75% the following month. Prepare a schedule of expected cash receipts for the first quarter.