Phillips Corporation's projected sales and direct materials purchases are as follows: Budgeted Sales Budgeted D.M. Purchases January $300,000 $60,000 February 400,000 70,000 March 500,000 90,000 Phillipss sales are 60% cash and 40% credit. Credit sales are collected 20% in the month of sale, 40% in the month following sale, and 36% in the second month following sale; 4% are uncollectible. Phillipss Direct Materials purchases are 40% cash and 60% on account. Direct Materials purchases on account are paid 50% in the month of purchase, and 50% in the month following purchase.

REQUIRED: 1. Prepare a cash collections budget for March only, using the following format: PHILLIPS CORPORATION Cash Collections Budget For March Cash sales: Plus: Collections on Credit Sales: = Total cash collections: 2. Determine the amount of cash payments for the DM purchases for March, using the following forma: PHILLIPS CORPORATION Cash Payments Budget for DM Purchase For March Payment of Cash Purchases: Plus: Payment of Credit Purchases: = Total Cash Payments for DM Purchases