Avril Company makes collections on sales according to the following schedule:
30% in the month of sale
60% in the month following sale
8% in the second month following sale
The following sales are expected:
$\begin{array}{|l|r|}
\hline & \text { Expected Sales } \
\hline \text { Tanuary } & \$ 100,000 \
\hline \text { February } & 120,000 \
\hline \text { March } & 110,000 \
\hline
\end{array}$
What should be the budgeted cash collections in March?
A) $105,000.
B) $110,000.
C) $110,800.
D) $113,000.

Question

Quizplus · Accepted Answer

In March, collections include 30% of March sales ($110,000 * 30% = $33,000), 60% of February sales ($120,000 * 60% = $72,000), and 8% of January sales ($100,000 * 8% = $8,000). Total = $33,000 + $72,000 + $8,000 = $113,000.

Avril Company Makes Collections on Sales According to the Following