Four Seasons Boots Ltd. had sales in November 2010 of $538,255. Ten percent of the sales were cash sales, with 70% of the credit sales collected one month after the sale, 25% collected two months after the sale, and 5% written off as bad debts. Sales are expected to grow by 2% per month between December 2010 and the end of 2011.
Required:
(a) Prepare a cash inflow budget for each month in 2011.
(b) Show the collection and write-off results for January's sales.