Fluffy Pillows makes decorative throw pillows for home use. The following information was taken from the Fluffy Pillows sales budget: (Click the icon to view the first quarter sales budget.) The following information was taken from the Fluffy Pillows direct materials budget: (Click the icon to view information from the direct materials budget.) Read the requirements Assume the following additional information was gathered about the types of sales made in the fourth quarter (October through December) of the previous year: E: (Click the icon to view the fourth quarter sales budget.) Requirement 1. Prepare the cash collections budget for January, February, and March, as well as the summary for the first quarter. Fluffy Pillows Cash Collections Budget For the Quarter Ended March 31 January February March 1st Quarter Cash sales Collections on credit sales: 75% of credit sales made last month 15% of credit sales made two months ago 8% of credit sales made three months ago Total cash collections Requirement 2. Prepare the cash payments budget for direct materials purchases for the months of January, February, and March, as well as a summary for the quarter. Fluffy Pillows Cash Payments Budget - Direct Materials For the Quarter Ended March 31 January February March 1st Quarter 40% of current month DM purchases 60% of last month's DM purchases Total cash payments for DM - Data table Fluffy Pillows Sales Budget: Type of Sale For the Quarter Ended March 31 Type of Sale: January February March 1st Quarter Cash sales (10%) $238,000 $289,000 $365,500 $892,500 Credit sales (90%) 2,142,000 2,601,000 3,289,500 $8,032,500 $2,380,000 $2,890,000 $3,655,000 $8,925,000 Total sales revenue The company's collection history indicates that 75% of credit sales is collected in the month after the sale, 15% is collected two months after the sale, 8% is collected three months after the sale, and the remaining 2% is never collected. fourth quarter sales budget.) as Data table Fluffy Pillows Sales Budget: Type of Sale For the Quarter Ended December 31 October November December 142,800 $ 137,200 $ 137,200 $ 1,285,200 1,360,800 1,234,800 $ 1,428,000 $ 1,372,000 $ 1,372,000 $ 4th Quarter Type of Sale: Cash sales (10%) Credit sales (90%) $ 417,200 3,880,800 ast wa $ 4,172,000 Total sales revenue rea as for Print Done ctober through December) of the previous year: view the fourth quarter sales budget.) - pa Data table Fluffy Pillows Excerpt from Direct Materials Budget For the Quarter Ended March 31 January February March 1st Quarter $ 1,527,075 $ 1,863,675 $ 2,144,700 $ 5,535,450 Total cost of DM purchases Assume that the total cost of direct materials purchases in December was $725,000. The company pays 40% of its direct materials purchases in the month of purchase, and pays the remaining 60% in the month after purchase. sl es s n pa Print Done obrunn Marah 1+Ouartor - Requirements 1. Prepare the cash collections budget for January, February, and March, as well as the summary for the first quarter. 2. Prepare the cash payments budget for direct materials purchases for the months of January, February, and March, as well as a summary for the quarter