1. Mike is concerned about cash flow and has requested that you prepare a Cash Collections Schedule, a Cash Payments Schedule, and a Cash Budget for the first two months of the year using the following information:
   • Cash collections for Mikes's bike Shop are 60% of sales in the month of sale, 30% collected in the month after the sale, and 10% collected in the second month after the sale.
   • Mike's Bike Shop pays 65% of its purchases of direct materials in the month of sale and 35% in the month after the purchase.

	November	December	January	February
Bike Sales	$150,000	$145,600	$160,000	$176,000
Purchases	$10,000	$10,600	$11,400	$12,500

• The beginning cash balance was $20,000 and Mike required minimum balance for the Mikes' Bike Shop is $15,000.
• Mikes estimates direct labor and manufacturing overhead to be $84,000 for January and $92,400 for February.
• Mikes would like to include in the Cash Budget in January, the purchase of a new industrial oven at a cost of $75,000.