Keen Office Furniture (KOF) is a privately owned, South Australian based company that has been supplying office furniture to the South Australian and national market for over 35 years. KOF has built key alliances with national commercial furniture companies which provide products of international design and quality. As a retailer KOF purchases products from various suppliers for sale to customers across Australia. Sixty percent of sales are collected in the month of sales while the remaining forty percent are collected in the first month following sales. Purchases are normally paid off in the first week of the month following purchases. KOF has never missed a discount of 2% on purchases. Other monthly cash expenses for operating costs (other than purchases) are $29,400. Data regarding purchases and sales for the first four months of 2019 are given below.

Month

Purchases

Sales Revenue

January

$68,000

$127,000

February

$70,000

$140,000

March

$64,000

$134,000

April

$65,000

$122,000

Required: (show formulas and computations for each requirement)

1. Calculate thetotal cash collectionsfor the month ofMarch.2.5 marks)

2.Determine theamount of cash paymentsin the month ofMarch.(2.5 marks)