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Paddu Company's budgeted sales and direct materials purchases follow. January was the first month of operations. Budgeted sales:January $139,000; February $188,600; March $251,200Budgeted direct materials

Paddu Company's budgeted sales and direct materials purchases follow. January was the first month of operations.

Budgeted sales:January $139,000; February $188,600; March $251,200Budgeted direct materials purchases:January $40,300; February $35,300; March $40,200Paddu's sales are35% cash and65% credit. It collects credit sales40% in the month of sale,60% in the month following the sale.Paddu's purchases are40% cash and60% on account. It pays purchases on account60% in the month of purchase, and40% in the month following purchase.

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