Budgeted sales in Washburn Company over the next four months are given below:
$$\begin{array} { l c l c r }
& \text { September } & \text { October } & \text { Novernber } & \text { December } \
\text { Budgeted sales } & \$ 100,000 & \$ 160,000 & \$ 180,000 & \$ 120,000
\end{array}$$
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:

Question

Budgeted sales in Washburn Company over the next four months are given below:
$$\begin{array} { l c l c r } 
& \text { September } & \text { October } & \text { Novernber } & \text { December } \
\text { Budgeted sales } & \$ 100,000 & \$ 160,000 & \$ 180,000 & \$ 120,000
\end{array}$$
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:

Quizplus · Accepted Answer

Cash collections for December include 25% of December's sales ($30,000), 50% of November's credit sales ($67,500), and 30% of October's credit sales ($36,000), totaling $133,500.

Budgeted Sales in Washburn Company Over the Next Four Months