Question

Monette Corporation has found that 80% of its sales in any given month are credit sales, while the remainder are cash sales. Of the credit sales, Monette Corporation has experienced the following collection pattern: 25% received in the month of the sale 50% received in the month after the sale 22% received two months after the sale 3% of the credit sales are never received November sales for last year were $85,000, while December sales were $115,000. Projected sales for the next three months are as follows: January sales $ 160,000 February sales $ 120,000 March sales $ 165,000 Requirement Prepare a cash collections budget for the first quarter, with a column for each month and for the quarter. (Round your answers to the nearest whole dollar.) Monette Corporation Cash Collections Budget For the Months of January through March January 32000 Cash sales Collections on credit sales: 25% Month of sale 50% Month after 22% Two months after Total cash collections

Answer 1

Based on the information available in the question , we can answer as follows:-

MONETTE Corporation
Cash Collection Budget
For the months of January through March
Particulars	November	December	January	February	March
Sales	85,000	115,000	160,000	120,000	165,000
Cash Sales(80% of sales)	68,000	92,000	128,000	96,000	132,000
Collection on credit sales:-
25% on Month of sale			32,000	24,000	33,000
50% Month After			46,000	64,000	48,000
22% Two months after			14,960	20,240	28,160
Total			92,960	108,240	109,160

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