Trever Reeds, a manufacturer of saxophone, oboe, and clarinet reeds, has projected sales to be $902,000 in October,$958,000 in November, $1,025,000in December, and $928,000 in January. Trever's sales are25% cash and 75% credit. The company's collection history indicates that credit sales are collected as follows:

20% in the month of the sale

70% in the month after the sale

8% two months after the sale

2% are never collected

Requirements

1. Prepare a sales budget for all four months, showing the breakdown between cash and credit sales.

2. Prepare a cash collection budget for December and January. Round all answers up to the nearest dollar.

Requirement 1. Prepare a sales budget for all four months, showing the breakdown between cash and credit sales.

Trever Reeds

Sales Budget

For the Four Months Ended January

October November December January

Cash sales

Credit sales

Total sales