Reference no: EM132967538

On March 1 of the current year, Spicer Corporation compiled information to prepare a cash budget for March, April, and May. All of the company's sales are made on account.

The following information has been provided by Spicer's management.

Month              Credit Sales
January         $300,000(actual)
February          $400,000(actual)
March         $448,000(estimated)
April         $731,000(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      30%
Collections two months after the sale   15%
Uncollectible accounts                       5%

Spicer's total cash expenditures for March, April, and May have been estimated at $1,200,000 (an average of $400,000 per month). Its cash balance on March 1 of the current year is $500,000. No financing or investing activities are anticipated during the second quarter.

Problem 1: Compute Spicer's budgeted cash balance at the ends of March, April, and May.