Shanghai Enterprises has asked for your assistance in preparing a cash budget for the month of December 2020 and has provided projected sales revenue data below:

Projected sales: October 2020 $144,000

November 2020 $205,000

December 2020 $220,000

All sales are on credit with 65% collected during the month of sale, 18% collected during the month following the sale, 15% during the second month after the sale and 2% uncollectable.

Required:

a) Prepare the cash receipts section of a cash budget for Shanghai Enterprises for the month of December 2020.

b) Explain how Shanghai Enterprises would go about constructing a cash budget for the first three months of 2021. Note that Shanghai plans to purchase a major piece of equipment costing $500,000 in February 2021.

Please solve a and b both as I need help in both the sections. Thanks for the help:)