The management team of Magnificent Modems, Inc. (MMI) wants to investigate the effect of several different growth rates on sales and cash receipts. Cash sales for the month of January are expected to be $210,000. Credit sales for January are expected to be $1,050,000. MMI collects 100 percent of credit sales in the month following the month of sale. Assume a beginning balance in accounts receivable of $1,008,000.

Required

Calculate the amount of sales and cash receipts for the months of February and March assuming a growth rate of 2 percent and 4 percent. The results at a growth rate of 1 percent are shown as an example.

Sales Budget
	Jan				Feb				Mar
Cash sales	$	210,000			$	212,100			$	214,221
Sales on account		1,050,000				1,060,500				1,071,105
Total budgeted sales	$	1,260,000			$	1,272,600			$	1,285,326
Schedule of Cash Receipts
Current cash sales	$	210,000			$	212,100			$	214,221
Plus collections from accounts receivable		1,008,000				1,050,000				1,060,500
Total budgeted collections	$	1,218,000			$	1,262,100			$	1,274,721

Use the following forms, assuming a growth rate of 2 percent and 4 percent:

Calculate the amount of sales and cash receipts for the months of February and March assuming a growth rate of 2 percent.

Sales Budget
		Growth rate of 2%
	Jan	Feb	Mar
Cash sales	$210,000
Sales on account	1,050,000
Total budgeted sales	$1,260,000
Schedule of Cash Receipts
Current cash sales	$210,000
Plus collections from accounts receivable	1,008,000
Total budgeted collections	$1,218,000

complete same for 4%