Felasco Nurseries Inc., has been in business for six years and has four divisions. EthanPoulis, the corporation's controller, has been asked to do a cash budget for the Southerndivision for the first quarter. Projected data supporting this budget follow. (10 Marks)

Sales Purchases

November - $160,000December- $ 86,800

December - $200,000January- $124,700

January- $120,000February- $ 99,440

February- $160,000March- $104,800

March- $140,000

Out of the total sales, 60% is on credit. Collection records of accounts receivable have shown that 30% of all credit sales are collected in the month of sale, 60% in the month following the sale and 8% in the second month following the sale, 2% of the sales are uncollectible. All purchases are paid for in the month after the purchase. Salaries and wages are projected to be $25,200 in January, $33,200 in February and $21,200 in March. Estimated monthly costs are utilities $4,220; collection fees $1,770; rent $5,300; equipment depreciation - $5,440; supplies - $2,480; small tools - $3,140; and misc - $1,900