Question

Fielding Corporation has found that 60% of its sales in November sales for last year were $105,000, while any given month are credit sales, while the remainder December sales were $120,000. Projected sales are cash sales. Of the credit sales, Fielding Corporation has experienced the following collection pattern: the next three months are as follows January sales.. $ 150,000 ...$ 125,000 S 180,000 February sales March sales 25% received in the month of the sale 50% received in the month after the sale 16% received two months after the sale 9% of the credit sales are never received 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.)

Answer 1

	January	February	March	Quarter
Cash sales	$150,000*40% = $60,000	$125,000*40% = $50,000	$180,000*40% = $72,000	$ 182,000
Collection on credit sales
25% month of sales	$150,000*60%*25% = $22,500	$125,000*60%*25% = $18,750	$180,000*60%*25% = $27,000	$    68,250
50% month after	$120,000*60%*50% = $36,000	$150,000*60%*50% = $45,000	$125,000*60%*50% = $37,500	$ 118,500
22% two months after	$105,000*60%*16% = $10,080	$120,000*60%*16% = $11,520	$150,000*60%*16% = $14,400	$    36,000
Total cash collections	$                                            128,580	$                                            125,270	$                                            150,900	$ 404,750

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