QUESTION 1 (27 marks) Crystal Company buys and sells a single product, a table lamp. Crystal expects the following sales for the next five months of 2020/2021. Oct Nov Dec Jan Feb Budgeted sales $110,000 $120,000 $140,000 $130,000 $150,000 1. The budgeted sales are expected to be 20% cash sales and 80% credit sales. 2. Collections on credit sales are as follows: 30% in the current month of sales 40% in 30 days 25% in 60 days 5% bad debt 3. 4. Actual sales for August and September are $90,000 and $80,000 respectively. Purchases 30% cash payment and the remainder 70% on credit. Credit purchase payment policy: 60% in the current month of purchase 40% one month following the month of purchase. 5. 6. Inventory policy: Closing inventory to be equal to the next two months' sales. Cost of goods sold is 65% of sales 7. Required: a) Prepare a Cash Receipts Budget for the month of Oct, Nov & Dec 2020. (15 marks) b) Prepare a Purchase Payment Budget for the month of Oct, Nov & Dec 2020. (12 marks)