Jokers' Co. budgets $1,000,000 for sales made. Customers have 3 months to pay the entire bill. Payments received are as follows:

1st month 30%

2nd month 40%

3rd month 25%

Estimated uncollectable 5%

100%

Jokers' pays $300,000 per month for direct materials, and $500,000 for direct labor.

Please tell management:

a) budgeted cash received each month from January to June. 10 marks

b) budgeted cash paid per month from January till June. 5 marks

c) whether cash or line of credit for each month is needed. Also state when to wait or pay for materials. 2 marks

d) the budgeted income statement. 15 marks

e) why there are differences between the income statement and cash budget (reconciliation). 5 marks