Jan Feb Mar

Sales 49,000 51,000 56,000

All units are sold on account for $13 each. Cash collections from sales are budgeted at 55% in the month of sale, 25% in the month following the month of sale, and the remaining 20% in the second month following the month of sale. On January 1 accounts receivable totaled $500,000 ($90,000 from November's sales and the remaining from December).

A schedule for each month showing budgeted cash receipts is needed. How can this be prepared? I am getting confused by this statement "On January 1 accounts receivable totaled $500,000 ($90,000 from November's sales and the remaining from December)."