Question
HolidayHoliday Corporation has found that 6060 % of its sales in any given month are credit sales, while the remainder are cash sales. Of the
HolidayHoliday
Corporation has found that
6060 %
of its sales in any given month are credit sales, while the remainder are cash sales. Of the credit sales,
HolidayHoliday
Corporation has experienced the following collection pattern:
| 25% received in the month of the sale |
50% received in the month after the sale | |
16% received two months after the sale | |
| 9% of the credit sales are never received |
November sales for last year were
$ 90 comma 000$90,000 ,
while December sales were
$ 115 comma 000$115,000.
Projected sales for the next three months are as follows:
January sales. . . . . . . . . . . . . . . . | $145,000 |
February sales. . . . . . . . . . . . . . . | $125,000 |
March sales. . . . . . . . . . . . . . . . . | $180,000 |
Requirement
Prepare a cash collections budget for the first quarter, with a column for each month and for the quarter. (Round your answers to the nearest whole dollar.)
Holiday Corporation | ||
Cash Collections Budget | ||
For the Months of January through March |
January | |
Cash sales |
|
Collections on credit sales: |
|
25% Month of sale |
|
50% Month after |
|
16% Two months after |
|
Total cash collections |
|
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