For a merchandising company, explain how total budgeted sales are determined.

How is depreciation accounted for on the cash

payments budget?

Michael , a merchandising company, has provided the following extracts from their budget for the first quarter of the forthcoming year:

Jan. Feb. March

Sales

(20% $450 000 $600 000 $800 000

cash)

The company collects 70 % of credit sales in the same month and the balance in the next month. Calculate the collections from the customers for the month of February.