Johnson, a manufacturer of saxophone, oboe, and clarinet reeds, has projected sales to be $904,000in October, $950,000 in November, $1,040,000 in December, and $934,000 in January.

Johnsons sales are 30% cash and 70% credit. The company's collection history indicates that credit sales are collected as follows:

25% in the month of the sale

60% in the month after the sale

14% two months after the sale

1% are never collected

Sales Budget For the Four Months Ended January October November December January Cash sales Credit sales Total sales January Budgeted Cash Collections from Customers For the Months of December and January December Cash sales Collection of credit sales: 25% of current month credit sales 60% of prior month credit sales 14% of credit sales two months ago Total collection of credit sales Total cash collections