GilyaCompany specializes in unique baskets. The company has budgeted the following sales for the first four months of the year:

Month

Expected sales in units

January

2,000

February

3,000

March

10,000

April

1,000

The selling price of thebaskets is $30 per unit. Based on history, the company expects that 10% of sales are cashreceivedin the month of sale. Of the credit sales,half is collected one month after sale and the remainder is collected two months after sale.Accounts receivable as at January1stwas $50,000; all of which is expected to be collected in January.

The company wants ending inventory to be equal to 20% of the following month's budgeted sales in units. On January 1st, 500 units were on hand.

Required:

a. Prepare sales budget for the first quarter of the year.

b. Prepare schedule of expected cash collections for the first quarter of the year.

c. Prepare production budget for the first quarter of the year.