Milo Company manufactures beach umbrellas. The company is preparing detailed budgets for the third quarter and has assembled the following information to assist in the budget preparation:

The Marketing Department has estimated sales as follows for the remainder of the year (in units):

The selling price of the beach umbrellas is $10 per unit.

July		42,500		October		32,500
August		95,000		November		19,000
September		64,000		December		19,500

All sales are on account. Based on past experience, sales are collected in the following pattern:

30	%	in the month of sale
65	%	in the month following sale
5	%	uncollectible

Sales for June totaled $440,000.

The company maintains finished goods inventories equal to 15% of the following months sales. This requirement will be met at the end of June.

Each beach umbrella requires 4 feet of Gilden, a material that is sometimes hard to acquire. Therefore, the company requires that the ending inventory of Gilden be equal to 50% of the following months production needs. The inventory of Gilden on hand at the beginning and end of the quarter will be:

June 30	100,750	feet
September 30	?	feet

Gilden costs $0.40 per foot. One-half of a months purchases of Gilden is paid for in the month of purchase; the remainder is paid for in the following month. The accounts payable on July 1 for purchases of Gilden during June will be $37,660.

Required: 1-a. Prepare a sales budget, by month and in total, for the third quarter. July August September Quarter Budgeted units sales Selling price per unit Budgeted sales 1-b. Prepare a schedule of expected cash collections, by month and in total, for the third quarter. Schedule of Expected Cash Collections July August September Quarter Accounts receivable, June 30: July sales August sales September sales Total cash collections