Hope Morris Cycle prepares an annual cash budget by quarters. Its cash budget is based on the following assumptions.

• The January 1, 2020 cash balance is expected to be $38,000.
• First quarter sales $180,000; second quarter sales $210,000; third quarter sales $240,000; Fourth quarter sales $270,000. 60% are collected in the quarter sold and 40% are collected in the following quarter. Accounts receivable of $60,000 at December 31, 2019 is expected to be collected in full in the first quarter of 2020.
• Short-term investment securities are expected to be sold for $2,000 cash in the first quarter.
• Management plans to purchase a truck in the second quarter for $10,000 cash.
• Hope Morris makes equal quarterly payments of its estimated $12,000 annual income taxes.

Required:

1. Prepare schedules for collections from customers for all quarters 2020. (2 marks)
2. Cash budget for the first two quarters 2020. (3 marks)