Horns and More, Ltd., a manufacturer of saxophone, oboe, and clarinet reeds, has projected sales to be $890,000 in October, $950,000 in November, $1,025,000 in December, and $920,000 in January. The company’s sales are 25% cash and 75% credit, and collection history indicates that credit sales are collected as follows: 

Requirements 

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.

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Check sum: December credit sales: $768,750 × 0.25 = $192,187.50