Chapter $7$ on Master Budget and Cash Budgeting Exercise

Orange was preparing its sales budget for the third quarter of $2014$ following the release of Premium Orange Juice. Forecast sales are as follows in millions of dollar.

October

$$200$ millions

November

$$250$ millions

December

$$325$ millions

Sales are $40\%$ cash and $60\%$ on credit. Fifty$-$five percent of the credit accounts are collected in the month of sale, $30\%$ in the following month, $10\%$ in the $3^{rd}$ month, and the balance is uncollectible and written off as bad debts. Hint:

Accounts receivable at the end of September to be received in October are $$39\mathrm{.}9$ million $(10\%$ of August credit sales of $$140$ million and $30\%$ of September credit sales of $$175$ million$).$

Prepare a schedule showing sales forecast and cash collections for the $3^{rd}$ quarter $2014.$