Grisham Corporation has found that 80% of its sales in any given month are credit sales, while the remainder is cash sales. Of the credit sales, Grisham Corporation has experienced the following collection pattern:
25% paid in the month of the sale
50% paid in the month after the sale
22% paid two months after the sale
3% of the sales are never collected
November sales for last year were $105,000, while December sales were $125,000. Projected sales for the next three months are as follows:
January sales ...................................................................................................... $165,000
February sales ..................................................................................................... $130,000
March sales ......................................................................................................... $180,000
Requirement
Prepare a cash collections budget for the first quarter, with a column for each month and for the quarter.