Question 2 (Total: 50 marks)

Fonsey Corporation, a merchandising company, has provided the following budget data:

Purchases	Sales	Month
$39,500	$69,000	January
47,200	65,900	February
37,500	61,200	March
54,000	79,850	April
59,500	72,600	May

Collections from customers are normally 63% in the month of sale, 20% in the month following the sale, and 14% in the second month following the sale. It is expected that the balance be uncollectible. Fonsey pays for purchases in the month following the purchase. Cash disbursements for expenses other than merchandise purchases are expected to be $13,500 for May. Fonsey's cash balance on May 1 was $24,500.

Required:

1. Compute the expected cash collections during May.
2. Compute the expected cash balance on May 31.