During October of 2018 Laranx Ltd. formulated its 2019 sales and purchases forecast and budget for its product FT45:

FT45 Sales forecast and Purchases budget

Details	Sales Units	Purchases $
November 2018	5,600	2,025,000
December 2018	3,800	1,498,500
January	4,800	2,151,000
February	5,400	2,295,000
March	3,200	1,377,000
April	1,700	1,576,125
May	3,200	2,192,625
June	2,400	2,700,000
July	1,000	787,500
August	2,200	900,000
September	4,000	562,500
October	1,900	1,462,500
November	2,500	1,237,500
December	2,000	1,552,500

Notes:

a) The company planned to sell one FT45 for $440 during 2019.

b) The closing stock level at the end of each month is to be held at a level equal to fifteen

percent (15%) of the budgeted sales for the next two (2) months. Closing raw material stock in units in store at the end of each month is to be equivalent to fifteen percent (15%) of the forecasted sales for the preceding 2 months.

c) It takes four (4) units of ES22 to produce one FT45. The cost of one unit of ES22 is $225.

d) The warehouse and stores managers estimate a monthly deterioration of 70 FT45 and 45

units of ES22. They have suggested that a provision should be made for these items'

damages and deterioration in store.

e) At the end of March 2019, the bank balance was in O/D of $125,000.

f) 20% of the company's sales were for cash; and 80% was received one month after sale

while 50% of purchases are for cash; 50% is paid for two months later.

g) Taxation for the second quarter of 2019 amounting to $300,000 was due in May 2019.

h) The company is to receive a dividend payment from its investment in equal amounts of

435,000 in the last two months of the second quarter of 2019.

i) In June of 2019 delinquent debtors repaid $2,800,000 of their debt to restore their

reputation with Laranx Ltd.

j) Operating and Miscellaneous expenses amounted to $130,000 and $90,000 respectively

on a monthly basis.

k) In April 2019 the CEO's company car was sold to his secretary for $750,000.

l) Rental income amounting to $4,310,000 per annum is budgeted for 2019.

m) A delivery van was bought for $3,330,000 and payment were made evenly in second

quarter of 2019.

n) Salesmen are paid commission based on the amounts collected from sales each month. The amount is 8% of sales collection each month.

o) A new plant for production was built in January for $1,500,000. Payments to the contractor were made in instalments as follows: $300,000 in May 2019; $300,000 in June 2019; and the balance in July 2019.

Required:

1,) A cash collection summary from sales showing cash and credit collections separately.

2.) A payment summary for purchases showing cash purchases and credit purchases separately.

3.) A cash budget for the second quarter of 2019. Clearly show amounts for cash sales, credit sales, cash purchases, credit purchases and totals.