Sales (5) 560,000$70,000 $65,000 $40,000 Sales in utits Sales are collected as follows (all sales are on accoun(k 45% in the month of sale, 55% the month after sale. There was no outstanding accounts receivable at the start of Jamaary Each unit sells for S10. Management requires that ending inventory be 20% of the following month's budgeted sales; inventory on hand at January 1 was 1,000 units Ending inventory for Aperil is 800 units Each unit requires 4 meters of fabric Management ould like to have ending inventory of fabric equal to 25% ofthe following moeth's production needs; there were 13,000 meters of fabric on hand on Jamary 1 Management pays for fabric purchases as follows: 60% in the month ofpurchase and 41%ee month after purchase. Each meter of fabric costs $2.00. Accounts payable on January I was $40,000, all of which will be paid during January Cash on hand at January 1 is $40,000 Management requires a minimum cash balance at the end of each month of $10,000. If necessary, management can borrow moey from the bank at an annual interest rate of 4% in increments of$1,000 Bocrowing occurs at the start of the month and repayments occur at the end of the month. For simplicity, ignore compound interest. Interest is only paid when the loan is repaid Management has budgeted the following for expenses (paid in cash in the month incurred) "REMEMBER THAT DEPRECIATION IS A NON-CASH ITEM Rent Depreciation Advertising Salaries January February March April $4,000 $1,300 $6,000 $3,000 $4,000 $1,500 $2,000 $3,000 $4,000 $1,500 $4,000 $4,000 $5,000 $3,000 Required: 1. a. Create a cash receipts budget for the first quarter of the year. b. What is the accounts receivable balance as at March 312 2. Create a production budget for the first four months of the year. 3. a. Create a direct materials budget for the first quarter of the year. b. Create a cash disbursements budget for direct materials for the first quarter of the year. c. What is the accounts payable balance as at March 31 4. Create a cash budget for the first quarter of the year. sales: Seles (3) $60,000 570,000 565,000 $40,000 Sales are collected as follows (all salesare on acco nn 45%2 the month of sale outstanding accounts receivable sn the start of Janaary Each unit sells for sIO Management requires that ending inventory he 20% of the following mainth's budgeted sales, inventory on 55% the month after sale. There was) hand at January I was 1,000 units Ending inventory for April is 800 units Each unit requires 4 meters of fabric. Management would like to have ending inventory of month's production needs; there were 13,000 meters of faberic on hand on Jamary I Managemeot pays for fabric purchases as follows: 60% in the month of purchase, m d 40% the man haf er purchase. Each meter of fabric oosts $2.00. Accounts payable on January I was 540,000 all of which will be paid during Jasuary Cash on hand at Jamuary 1 is $40,000 Management requires a minimam cash balance at the end of each month or $10,000. If necessary, management can borow money from the bank at an annual interest rate of4% in increments of $1,000 Borrowing occurs at the start of the mooth and repayments cceur at the end ot the month. For simplicity, ignare compound interest. Interest is only paid wihen the loan is repaid. Management bas budgeted the following for expenses (paid in cash in the month incurred) "REMEMBER THAT DEPRECIATION IS A NON-CASH ITEM: January February March April Rent Depreciation Advertising Salaries $4,000 $1,500 $2,000 53,000 S4 S1,500 $4,000 $3,000 $4,000 $1,500 $5,000 3,000 54,000 51,500 $6,000 $3,000 550000 Sale, reonteclod as feliws fall sales ir 'nxttuti. 45% "te mitb orule, 59% te mnh ater sale, nere war nu standing acovants roceicable at the starl of aracy lach unit scls for S10 Maagmei requ res thai esate imetiary be 20% of the Solkrmng minin bleeted sales; iseenry on haad st litiary i wan Endng investary fot April is s00 snits affabrx, Managettest would likr thwe endru invent ry tif fibric equio 29% of the filming neth's prodacion seeds, there wew 13,009 nters of fhric on hand oe Janaary t Maragement pays fir fabric prchasa is 5linm:ors n the noorh ofpurchase, eld 40% the morch anrr putchie. Each meter Accouns payable on lansary 1 pas 580 ,0% al of wfich will se paisd during fanuary Cioh on hard w Jaxsary I ts $40.000 Managonert requiesa mnian cash balance at the esd of cach mosh orsion secessary, managensent cax boo aeeey thom the bonk a as Bemwing ocears al the sart of the rsarth and repeyments occour at the end of the mooth For simplicty, igpare coumpound irleest Isicrcs is osly puid when the loin is repaid las bedgetod the folkrwing for expanes tpid in cash in the moh incuree)"REMEMBER THAT January February March April $200 $3000 Required 1. a. Create a cash receipts budget for the first quarter of the year b. What is the accounts receivable balance as at March 31? 2. Create a production budget for the first four months of the year. 3, a. Create a direct materials budget for the first quarter of the year b. Create a cash disbursements budget for direct materials for the first quarter of the year. c. What is the accounts payable balance as at March 31 4. Create a cash budget for the first quarter of the year