Brandon Wholesalers has found that 80% of its sales in any given month are credit sales, while the remainder are cash sales. Of the credit sales, Brandon Wholesalers has experienced the following collection pattern:
25% paid in the month of the sale
50% paid in the month after the sale
20% paid two months after the sale
5% of the sales are never collected
November sales for last year were $100,000, while December sales were $120,000.
Projected sales for the next three months are as follows:
January sales......................................................................................... $160,000
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.