Radcliff Ltd. has budgeted the following sales for the next three months:

	January	February	March
Budgeted Sales	$80,000	$100,000	$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	50%
First month following sale	40%
Second month following sale	9%
Uncollectible	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

1. Compute the budgeted cash receipts for March.
2. 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.
3. Why is it important for a company to create monthly cash budgets?