Mernda Superior Products (MSP) is a manufacturing business located in Victoria. The company designs and assembles quality furniture that is sold at premium price. MSP Store has currently signed a contract to retail its products through various distributors. Customers of MSP are located throughout Victoria. Seventy percent of sales are collected in the month of sales while the remaining thirty percent are collected in the first month following sales. Purchases are normally paid off in cash in the month of purchases. MSP has never missed a discount of 2% on purchases. Other monthly cash expenses for operating costs (other than purchases) are $20,500. Data regarding purchases and sales for four months of 2021 are given below. 

Month	Purchases	Sales Revenue
January	$40,000	$  98,000
February	$46,000	$105,000
March	$54,000	$116,000
April	$52,000	$124,000

1. Calculate the total cash collections for the month of March.

2. Determine the amount of cash payments in the month of March.

Answer rating: 100% (QA)

To calculate the total cash collections for the month of March we need to consider the sales revenue for March and the collection pattern specified in ... View the full answer