Royal Company is preparing budgets for the quarter ending June 30.

Budgeted sales for the next five months are:

April20,000 units

May50,000 units

June30,000 units

July25,000 units

August15,000 units.

The selling price is $10 per unit and all sales are on credit. However, the March 31 accounts receivable balance of $30,000 will be collected in full. Royal's collection pattern is:

70% collected in the month of sale,

25% collected in the month following sale,

5% is uncollectible.

Requirements:

1.Prepare sales budget

2.Prepare cash collection budget