Reference no: EM132967851

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