Requirement 2. Prepare the cash payments budget for direct materials purchases for the month of January February, and March, as well as a summary for the quarter Pillows Inc. Cash Payments Budget. Direct Materials For the Quarter Ended March 31 January February March 1st Quarter 40% of current month DM purchases 50% of last month's DM purchases Total cash payments for DM Requirement 1. Prepare the cash collections budget for January February, and March, as well as the summary for the first quarter Pillows Inc Cash Collections Budget For the Quarter Ended March 31 January 221,000 $ February 272,000 $ March 280,500 $ $ 1st Quarter 773,500 1 836,000 Cash sales Collections on credit sales 75% of credit sales made last month 15% of credit sales made two months ago 8% of credit sales made three months ago Total cash collections 926, 100 204,120 102,816 1 491 750 185,220 298 350 4,253,850 687 690 310.464 108,864 98 784 $ 1.454,036 $ 2,057,834 S 2,513,634 $ 6,025 504 Pillows Inc Excerpt from Direct Materials Budget For the Quarter Ended March 31 January February March 1st Quarter Total cost of DM purchases $ 1,206,704 S 1421,640 $ 1,520,496 $ 4.148 840 Assume that the total cost of direct materials purchases in December was $725,000 The company pays 40% of its direct materials purchases in the month of purchase and pays the remaining 60% in the month after purchase Pillows Inc. Sales Budget: Type of Sale For the Quarter Ended March 31 March Type of Sale: Cash sales (10%) January S221,000 1.989,000 February $272.000 2,448,000 $280,500 2,524 500 1st Quarter $773,500 $6,961,500 Credit sales (90%) Total sales revenue $2,210,000 $2.720.000 $2,805 000 $7,735 000 The company's collection history indicates that 75% of credit sales is collected in the month after the sale, 15% is collected two months after the sale, 8% is collected three months after the sale, and the remaining 2% is never collected X ) Data table anuary, Fe Pillows it Collection Type of Sale: Cash sales (10%) Pillows Inc. Sales Budget: Type of Sale For the Quarter Ended December 31 October November December 142,800 S 137,200 $ 137,200 $ 1 285 200 1,360,800 1,234,800 $ 1.428,000 $ 1,372,000 $ 1,372,000 $ 4th Quarter arter End $ ary 221.000 Credit sales (90%) 417,200 3,880,800 4,172,000 $ Total sales revenue 26,100