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Answer & Explanation:BE 23.6Identify the budgets in Column B from which dollar amounts are transferred directly in constructingthe budgets listed in Column A.Column A                                                                                       Column B1. Budgeted income statement                                                 a. Direct materials budget2. Budgeted balance sheet                                                       b. Cost of goods sold budget3. Cash flow budget                                                                  c. Production budget                                                                  4. Cost of goods sold budget                                                    d. Payables budget5. Production budget                                                                 e. Sales budget                                                                                                                                                              f. Budgeted income statementE 23.1The following information is from the manufacturing budget and the budgeted financial statementsof Fabor Fabrication:Direct materials inventory, Jan. 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 73,000Direct materials inventory, Dec. 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85,000Direct materials budgeted for use during the year . . . . . . . . . . . . . . . . . . . . . . . . . 264,000Accounts payable to suppliers of materials, Jan. 1 . . . . . . . . . . . . . . . . . . . . . . . . 46,000Accounts payable to suppliers of materials, Dec. 31 . . . . . . . . . . . . . . . . . . . . . . . 77,000Compute the budgeted amounts for:a. Purchases of direct materials during the year.b. Cash payments during the year to suppliers of materials.E 23.8Sales on account for the first two months of the current year are budgeted as follows:Jan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $800,000Feb. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 880,000All sales are made on terms of 2/10, n/30 (2% discount if paid in 10 days, full amount by 30 days);collections on accounts receivable are typically made as follows:Collections within the month of sale:Within discount period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70%After discount period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10Collections within the month following sale:Within discount period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12After discount period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6Returns, allowances, and uncollectibles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100%Compute the estimated cash collections on accounts receivable for the month of February.E 23.9On March 1 of the current year, Spicer Corporation compiled information to prepare a cash budgetfor March, April, and May. All of the company’s sales are made on account. The following informationhas been provided by Spicer’s management:Month                                                                                                         Credit SalesJan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $300,000 (actual)Feb. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 400,000 (actual)Mar. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 600,000 (estimated)Apr. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 700,000 (estimated)May. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 800,000 (estimated)The company’s collection activity on credit sales historically has been as follows:Collections in the month of the sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50%Collections one month after the sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30Collections two months after the sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15Uncollectible accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5Spicer’s total cash expenditures for March, April, and May have been estimated at $1,200,000 (anaverage of $400,000 per month). Its cash balance on March 1 of the current year is $500,000. Nofinancing or investing activities are anticipated during the second quarter.Compute Spicer’s budgeted cash balance at the ends of March, April, and May.