Raber Corporation has found that 60% of its sales in any given month are credit sales, while the remainder are cash sales. Of the credit sales, the company has experienced the following collection pattern:
25% received in the month of the sale
50% received in the month after the sale
18% received two months after the sale
7% of the credit sales are never received
November sales for last year were $85,000, while December sales were $120,000. Projected sales for the next three months are as follows:
January sales . ............................................................................................... $170,000
February sales . ............................................................................................. $125,000
March sales . .................................................................................................. $185,000
Requirement
Prepare a cash collections budget for the first quarter, with a column for each month and for the quarter.