1.ABC Company started business on January 1, 20xx. The companyestimated that sales for the first six months would be asfollows:

Month	Units	Dollars
January	10,000	$ 50,000
February	8,000	40,000
March	15,000	75,000
April	17,000	85,000
May	22,000	110,000
June	30,000	150,000

The company sells all items on account and expects collectionsof accounts receivable to be as follows: 60% in the month of thesale, and the remaining 40% in the month after the sale.

Required:

1. Compute the expected cash collections during the months ofJanuary, February, March, April, May and June.
2. The company has decided that finished goods inventory at theend of each month should ideally be equal to 40% of next month’ssales. What should budgeted production be for each of the firstfour months?
3. It takes two pounds of raw material to make one unit offinished product. The company wants to keep an ending inventory ofraw material equal to 30% of next month’s production needs. Howmany pounds of raw material should be purchased in each of thefirst three months?
4. The raw material costs $2 per pound. The company pays for 70%of its purchases during the month of purchase and the remainder inthe following month. How much cash will be disbursed during themonth of March for the purchase of raw material?
5. The projected cash balance on March 1 is $13,500. What is theestimated cash balance at the end of the month? (Prepare a formalcash budget for the month of March.)