Jackson Company has developed the following sales projections for the calendar year:
$$\begin{array} { l r }
\text { May } & \$ 100,000 \
\text { June } & 120,000 \
\text { July } & 140,000 \
\text { August } & 160,000 \
\text { September } & 150,000 \
\text { October } & 130,000
\end{array}$$
Normal cash collection experience has been that 50% of sales is collected during the month of sale and 45% in the month following the sale. The remaining 5% of sales are never collected. Jackson's budgeted cash collections for the third calendar quarter are: (CMA adapted)

Question

Jackson Company has developed the following sales projections for the calendar year:
$$\begin{array} { l r } 
\text { May } & \$ 100,000 \
\text { June } & 120,000 \
\text { July } & 140,000 \
\text { August } & 160,000 \
\text { September } & 150,000 \
\text { October } & 130,000
\end{array}$$
Normal cash collection experience has been that 50% of sales is collected during the month of sale and 45% in the month following the sale. The remaining 5% of sales are never collected. Jackson's budgeted cash collections for the third calendar quarter are: (CMA adapted)

Quizplus · Accepted Answer

The third quarter includes July, August, and September. Cash collections for these months include 50% of each month's sales and 45% of the previous month's sales. Calculating: July: 50% of $140,000 + 45% of $120,000 = $70,000 + $54,000 = $124,000; August: 50% of $160,000 + 45% of $140,000 = $80,000 + $63,000 = $143,000; September: 50% of $150,000 + 45% of $160,000 = $75,000 + $72,000 = $147,000. Total = $124,000 + $143,000 + $147,000 = $414,000.

Jackson Company Has Developed the Following Sales Projections for the Calendar