Question 2 Time: 20 minutes Total: 10 marks For the second quarter of the following year Cloaks Company has projected sales and production in units as follows: Jan Feb Mar Sales 50,000 52,000 57,000 Production 54,000 49,000 50,000 Cash-related production costs are budgeted at $12 per unit produced. Of these production costs, 40% are paid in the month in which they are incurred and the balance in the next month. $125,000 per month will account for Selling and administrative expenses. On January 31 the accounts payable balance totals $225,000, which will be paid in February. All units are sold on account for $17 each. Cash collections from sales are budgeted at 60% in the month of sale, 20% in the month following the month of sale, and the remaining 20% in the second month following the month of sale. On January 1 accounts receivable totaled $655,000 ($140,000 from November's sales and the remaining from December). Required: 1. Prepare a schedule for each month showing budgeted cash disbursements for Cloaks Company (5 marks) 2. Prepare a schedule for each month showing budgeted cash receipts for Cloaks Company