Pillows Limited Excerpt from Direct Materials Budget Assume that the total cost of direct materials purchases in December was $725,000. The company pays 40% of its direct materials purchases in the month of purchase, and pays the remaining 60% in the month after purchase. The following information was taken from the Pillows Limited direct materials budget: (Click the icon to view information from the direct materials budget.) Read the requirements. Data table Pillows Limited makes decorative throw pillows for home use. The following information was taken from the Pillows Limited sales budget: (Click the icon to view the first quarter sales budget.) Assume the following additional information was gathered about the types of sales made in the fourth quarter (October through December) of the previous year: (Click the icon to view the fourth quarter sales budget.) quirements 1. Prepare the cash collections budget for January, February, and March, as well as the summary for the first quarter. 2. Prepare the cash payments budget for direct materials purchases for the months of January, February, and March, as well as a summary for the quarter. The company's collection history indicates that 75% of credit sales is collected in the month after the sale, 15% is collected two months after the sale, 8% is collected three months after the sale, and the remaining 2% is never collected. Requirement 2. Prepare the cash payments budget for direct materials purchases for the months of January, February, andMarch, as well as a summary for the quarter