Ella Ltd.'s accountant Bella has prepared the below forecasted credit sales for the quarter January to March. 50% of sales will be collected in the month of sales, 40% of sales will be collected in the month following the sales, and 10% of sales collected two months after the sales.

	January	February	March
Credit Sales	$80,000	$85,000	$90,000

Inventory purchases are on credit and average 50% of forecasted credit sales of each month whereby 50% are paid for in the month of the purchase, 30% in the following month and 20% two months after the purchase. Operating expenses are paid in the month incurred and include monthly rent $3,000, wages $15,000, and utilities $300.

Required:

a)Prepare a schedule of cash collections (receipts) on account for March.

b)What would the accounts receivable balance be on 30 March?

c)Prepare a schedule of cash disbursements (payments) for March.

d)Prepare a cash budget for March. Cash balance on 1^st March is $50,000.

e)Ella Ltd. is considering the purchase of a new equipment in April to advance its operations. The new equipment will cost $40,000 in cash. Ella Ltd. was hoping to fund the purchase of the new equipment from the cash flows of the business. Does Ella Ltd. have enough cash for the purchase?