Leret Reeds, a manufacturer of saxophone, oboe, and clarinet reeds, has projected sales to be $ 908,000 in October, $ 950,000 in November, $ 1,065,000 in December, and $ 938,000 in January. Leret’s sales are 30% cash and 70% credit. The company’s collection history indicates that credit sales are collected as follows:
20% in the month of the sale
65% in the month after the sale
10% two months after the sale
5% are never collected
1. Prepare a sales budget for all four months, showing the breakdown between cash and credit sales.
2. Prepare a cash collections budget for December and January. Round all answers up to the nearest dollar.