On 1 December 2018, Tire-Lire, SNC, is attempting to project cash receipts and disbursements to 31 January 2019. On this latter date, a note will be payable in the amount of €100,000. This amount was borrowed in September to carry the company through the seasonal peak in November and December. 

The trial balance on 1 December shows in part the following information:

Cash .......................................................................................... €10,000 

Debtors ..................................................................................... 280,000 

Allowance for bad debts ....................................................... €15,800

Stock ............................................................................................ 87,500 

Creditors .....................................................................................92,000 

Sales terms call for a 2% discount if payment is made within the first 10 days of the month after purchase, with the balance due by the end of the month after purchase. Experience has shown that 70% of the billings will be collected within the discount period, 20% by the end of the month after purchase, 8% in the following month, and that 2% will be uncollectable. There are no cash sales. 

The average selling price of the company’s products is €100 per unit. Actual and projected sales are 

October actual .....................................................................................    €180,000 

November actual .................................................................................     250,000 

December estimated .........................................................................      300,000 

January estimated ..................................................................................... 150,000 

February estimated ............................................................................       120,000 

Total estimated for year ending 30 June 2019 ..................................  1500,000 

All purchases are payable within 15 days. Thus approximately 50% of the purchases in a month are due and payable in the next month. The average unit purchase cost is €70. Target closing stocks are 500 units plus 25% of the next month’s unit sales. 

Total budgeted marketing, distribution and customer-service costs for the year are €400,000. Of this amount, €150,000 is considered fixed (and includes depreciation of €30,000). The remainder varies with sales. Both fixed and variable marketing, distribution and customer-service costs are paid as incurred. 

Required

Prepare a cash budget for December and January. Supply supporting schedules for collections of receivables for raw materials, and marketing, distribution and customer-service costs.