Smart Corp. has the following expected sales:

	January	February	March	April
Sales ($)	$60,000	$70,000	$65,000	$40,000

Each unit sells for $10. Sales are collected as follows (all sales are on account): 45% collected in the month of sale, 55% collected one month after sale. There was no outstanding accounts receivable at the start of January.

Management requires that ending inventory be 20% of the following month's budgeted sales; inventory on hand at January 1 was 1,000 units.

Required: a) Prepare a schedule of expected cash collections for the first quarter of the year. b) What is the account receivable balance as at March 31st?

c) Prepare a production budget for the first quarter of the year.