Question

1A. Big City Manufacturing (BCM) is preparing its cash budget and expects to have sales of $450,000 in January, $375,000 in February, and $555,000 in March. If 20% of the sales are for cash, 45% are credit sales paid in the month after the sale, and another 35% are credit sales paid 2 months after the sale, what are the expected cash receipts for March? Enter your answer rounded to two decimal places. Do not enter $ or comma in the answer box. For example, if your answer is $12,300.456 then enter as 12300.46 in the answer box.

1B. In problem 7, Big City Manufacturing (BCM) assumed that all credit sales were paid in full, with no bad debt expense. For this problem, please assume that bad debt expense is again 0% for BCM. Purchases for next month's sales are 65% of projected sales for the next month, and April sales are estimated to be $495,000; purchases for April are paid in cash in March. "Other payments," which include wages, rent, and taxes, are 25% of sales for the current month. Construct a cash budget for March using your expected cash receipts from problem 7 and calculate the average net cash flow during the month of March. Enter your answer rounded to two decimal places. Do not enter $ or comma in the answer box. For example, if your answer is $12,300.456 then enter as 12300.46 in the answer box.

**YOU NEED 1A TO ANSWER 1 B**

Answer 1

Solution 1A		Amount
	Collection for March-555000*20%	111,000.00
	Collection for Feb-375000*45%	168,750.00
	Collection for Jan-450000*35%	157,500.00
	Total collection in March	437,250.00
Solution 1B		Amount
	April month sale	495,000.00
	March month payment-495000*65%	321,750.00
	Cash budget
	Cash receipt	437,250.00
	Less payments
	Suppliers	(321,750.00)
	Wages and rent-555000*25%	(138,750.00)
	Net cash flow in March	(23,250.00)