Pillows unlimted makes decorative throw pillows for home use. The following information was taken from the Pillows Unlimited Sales Budget.

Sales budget : Type of Sale

For The Quater Ended March 31

Type of Sale:	January	February	March	1st Quarter
Cash sales (10%)	$140,000	$154,000	$161,000	$455,000
Credit sales (90%)	1,260,000	1,386,000	1,449,000	4,095,000
Total sales revenue	1,400,000	1,540,000	1,610,000	4,550,000

Assume the following additional information was gathered about the types of sales made in the fourth quarter (October through December) of the previous year:

Sales Budget: Type of Sales

For the Quarter Ended December 31

Type of Sales	October	November	December	4th Quarter
Cash sales (19%)	$ 142,800	151,200	137,200	431,200
Credit sales (90%)	1,285,200	1,360,800	1,234,800	3,880,800
Total sales revenue	1,428,000	1,512,000	1,372,000	4,312,000

Direct Materials Budget for March 31

	January	February	March	1st Quarter
Total cost of DM purchases	$771,750	$836,250	$873,000	$2,481,000

Requirement 1. Prepare the cash collections budget for January, February, and March, as well as the summary for the first quarter.

	January	February	March	1st Quarter
Cash Sales
Collection on Credit Sales:
75% of credit sales made last month
15% of crdit sales two months ago
8% of credit sales made three months ago
Total cash collection

Requirement 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.

	January	February	March	1st Quarter
40% of current month DM purchases
60% of last months DM purchases
Total cash payments for DM