Eddie's Bar and Restaurant Supplies expects its revenues and expenses for the first 5 months of the year to be:

Sales Expenses

January $24,000 $18,000

February 20,000 21,300

March 35,000 19,100

April 22,000 22,400

May 28,000 14,700

80% of the firm's sales are on credit. Past experience shows that 40% of accounts receivable are collected in the month after sale, and the remainder is collected in the second month after sale. 100% of Expenses are paid in the month after it occurs.

Eddie's had a cash balance of $2,000 on March 1, which is also its minimum required cash balance. There is an outstanding loan of $6,000 that was taken out on January 1^st and paid when cash is available.

a. Prepare a schedule of cash receipts for Jan, Feb, March, April, and May. (3 points)

b. Prepare a cash budget for Jan, Feb, March, April, and May, each month ending with the ending cash balances. (6 points)