Question 1 (13 marks) Radcliff Ltd, has budgeted the following sales for the next three months: January $80,000 Budgeted Sales February $100,000 March $140,000 Ninety percent of sales are on account and ten percent of sales are cash sales. A month's sales on account are collected as follows: Month of sale First month following sale Second month following sale Uncollectible 50% 40% 9% 1% The company requires a minimum cash balance of $7,000 to start a month. The beginning cash balance in March is budgeted to be $8,000. The following additional information has been provided for the company: February Inventory purchases (75% paid in February, the remainder paid in March) $55,000 March Inventory purchases (75% paid in March, the remainder to be paid in April) $43,000 Operating expenses (all paid in March) 35,000 Depreciation expense for March 15,000 Dividends paid in March 7,500 a) Compute the budgeted cash receipts for March. b) Prepare a cash budget in good form for the month of March. The company can borrow in any dollar amount and will not pay interest until April c) Why is it important for a company to create monthly cash budgets