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Budgeted sales in Washburn Company over the next four months are given below: September October November...

Budgeted sales in Washburn Company over the next four months are given below:

September October November December
Budgeted sales $100,000 $160,000 $180,000 $120,000

Twenty-five percent of the company's sales are for cash and 75% are on account. Collections for sales on account follow a stable pattern as follows: 50% of a month's credit sales are collected in the month of sale, 30% are collected in the month following sale, and 15% are collected in the second month following sale. The remainder is uncollectible. Given these data, cash collections for December should be:

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Cash collected in December:
from cash sale of December $30,000 $120000*25%
from Credit sale of December $45,000 $120000*75%*50%
from Credit sale of November $40,500 $180000*75%*30%
from Credit sale of October $18,000 $160000*75%*15%
Total Cash collected in December $133,500 ANSWER
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