For the second quarter of the following year Cloaks Company has projected sales and production in units as follows:

Jan

Feb

Mar

Sales

57,000

59,000

64,000

Production

61,000

56,000

57,000

Cash-related production costs are budgeted at $8 per unit produced. Of these production costs, 40% are paid in the month in which they are incurred and the balance in the next month. $180,000 per month will account for Selling and administrative expenses. On January 31 the accounts payable balance totals $220,000, which will be paid in February.

All units are sold on account for $12 each. Cash collections from sales are budgeted at 60% in the month of sale, 20% in the month following the month of sale, and the remaining 20% in the second month following the month of sale. On January 1 accounts receivable totaled $642,000 ($110,000 from November's sales and the remaining from December).

Required:

1.Prepar a schedule for each month showing budgeted cash disbursements for Cloaks Company.(8 marks)

2.Prepar a schedule for each month showing budgeted cash receipts for Cloaks Company.

(8 marks)