Center Company makes collections on sales according to the following schedule:
$30 \%$ in the month of sale
$60 \%$ in the month following sale
$8 \%$ in the second month following sale
The following sales are expected:
$$\begin{array} { l r }
& \text { Expected Sales } \
\text { January } & \$ 100,000 \
\text { February } & \$ 120,000 \
\text { March } & \$ 110,000
\end{array}$$
Cash collections in March should be budgeted to be:

Question

Center Company makes collections on sales according to the following schedule:
$30 \%$ in the month of sale
$60 \%$ in the month following sale
$8 \%$ in the second month following sale
The following sales are expected:
$$\begin{array} { l r } 
& \text { Expected Sales } \
\text { January } & \$ 100,000 \
\text { February } & \$ 120,000 \
\text { March } & \$ 110,000
\end{array}$$
Cash collections in March should be budgeted to be:

Quizplus · Accepted Answer

In March, collections include 30% of March sales ($110,000 * 30% = $33,000), 60% of February sales ($120,000 * 60% = $72,000), and 8% of January sales ($100,000 * 8% = $8,000). Total = $33,000 + $72,000 + $8,000 = $113,000.

Center Company Makes Collections on Sales According to the Following 30%30 \%30%

Center Company Makes Collections on Sales According to the Following $30 \%$