Given below are three independent scenarios. No relation could be established between these three scenarios.

(a) CASH BUDGET

California Products Company has the following data as part of its budget for the 2nd quarter:

	Apr	May	Jun
Cash collections	$30,000	$32,000	$36,000
Cash payments:
Purchases of inventory	4,500	4,600	3,800
Operating expenses	7,200	7,600	8,000
Capital expenditures	0	24,500	5,200

(b) SALES BUDGET

California Products Company is creating an operating budget for the third quarter and will begin with a sales budget. Budgeted sales are $ 100,000 in July, $120,000 in August, and $160,000 in September. 75% of sales are cash and 25% of sales are on account.

(c) PURCHASES BUDGET

California Company prepared the following sales budget:

Month	Budgeted Sales
March	$ 200,000
April	$ 180,000
May	$ 220,000
June	$ 260,000

Cost of goods sold is budgeted at 60% of sales, and the inventory at the end of February was $ 36,000. Desired inventory levels at the end of each month are 30% of the next month's cost of goods sold.

Required

(1) Prepare a Cash Budget for California Products Company for the second quarter (April June) based on the information given in (a) above: (10 marks)

(2) Please use the following format and prepare a sales budget based on information given above in (b). (10 marks)

Sales Budget	Jul	Aug	Sep
Cash sales: 75%
Credit sales: 25%
Total sales

(3) Prepare Purchases Budget for March, April, and May based on information given above in (c) (10 marks)

(4). Explain the meaning and purposes of Operational budgets, flexible budgets, and Master Budget (10 marks)