The G-May Company has been accumulating operating data in order to prepare an annual budget. Details regarding G-Mays projected sales for the first three months of the coming year are listed below; also included are sales from the last two months of the previous year. Note that there are cash and credit sales budgeted each month.

Estimated Monthly Sales Type of Monthly Sale

November $520,000 Cash sales 10%

December 664,000 Credit sales 90%

January 530,000

February 500,000

March 629,000

Collection Pattern for Credit Sales

Month of sale 35%

First month following sale 50%

Second month following sale 15%

G-Mays policy is to have 15% of the next months projected production on hand at the end of each month. G-Mays specialized quilts require 2.5 yards of material each. The average cost of material is $3.25/yd. As a precaution, G-May wants material on hand at the end of the each month equal to 10% of the next months production.

Planned Unit Sales by Month

January	13,250	quilts
February	12,500	quilts
March	15,725	quilts
April	14,500	quilts
May	15,300	quilts

It is the policy of G-May to have at least $150,000 cash on hand at the end of each month, as was the balance on December 31 of the prior year. G-May has an agreement with the local bank that allows them to borrow short term loans at an annual interest rate of 8%. G-May pays back their loans as soon as fiscally possible. Cash is borrowed at the beginning of the month in which the shortage is budgeted, and repaid on the last day of the month. In addition to the cash collections and materials budget listed above, projections for collections and disbursements for each month of the first quarter are as follows:

Collections/Disbursements January February March

Salaries/Benefits $165,000 $149,000 $172,000

Depreciation 25,000 25,000 25,000

Insurance 45,000 8,000 8,000

Property taxes 98,000 --- ---

Advertising 53,000 50,000 48,000

Office Supplies 22,500 18,000 12,500

Maintenance 35,000 26,000 28,000

Other operating expenses 32,000 36,000 37,500

Equipment 45,000 --- ---

Required:

Create a cash collections budget, production budget, direct materials purchases budget and cash budget for January, February and March. Think how each budget affects the other. Prepare in good form in Excel, separate columns for each month. Extra 5 points for 1^st quarter totals for all budgets. Round all figures to whole dollars.