Relevant data from 2018 operating budgets for Gleason Works Company are shown below:

	February	March	April	May
Sales revenue	$270,000	$350,000	$480,000	$520,000
Direct materials purchases		$108,000	120,000	136,000
Direct labor			100,000	115,000
Manufacturing overhead			92,000	80,000
Selling and administrative expenses			108,000	90,000

All sales are on account. Collections are expected to be 60% in the month of sale, 35% in the first month following the sale, and 5% in the second month following the sale. Fifty-five percent (55%) of direct material purchases are paid in cash in the month of purchase, and the balance due is paid in the month following the purchase. All other items above are paid in the month incurred.

Other data:

1. Other receipts: April Collection of notes receivable $15,000;

May Proceeds from sale of stock securities $8,000. 2. Other disbursements: May-payment of a cash dividend of $20,000.

The companys cash balance on April 1, 2018, is expected to be $65,000. The company wants to maintain at least a minimum cash balance of $50,000.

Instructions

(a) Prepare schedules for (1) expected collections from customers and (2) expected

payments for direct materials purchases.

(b) Prepare a cash budget for April and May in columnar form. (If money is borrowed ignore interest.)