The following credit sales are budgeted by Garcia Company: $$\begin{array} { l r }
\text { January } & \$ 255,000 \
\text { February } & 375,000 \
\text { March } & 525,000 \
\text { April } & 450,000
\end{array}$$ The company's past experience indicates that 70% of the accounts receivable are collected in the month of sale, 20% in the month following the sale, and 8% in the second month following the sale. The anticipated cash inflow for the month of March is

Question

The following credit sales are budgeted by Garcia Company: $$\begin{array} { l r } 
\text { January } & \$ 255,000 \
\text { February } & 375,000 \
\text { March } & 525,000 \
\text { April } & 450,000
\end{array}$$ The company's past experience indicates that 70% of the accounts receivable are collected in the month of sale, 20% in the month following the sale, and 8% in the second month following the sale. The anticipated cash inflow for the month of March is

Quizplus · Accepted Answer

The anticipated cash inflow for the month of March is $462,900. This is calculated as follows:Cash inflow from January sales = 70% of $255,000 = $178,500Cash inflow from February sales = 20% of $255,000 + 70% of $375,000 = $285,000Cash inflow from March sales = 8% of $255,000 + 20% of $375,000 + 70% of $525,000 = $462,900

The Following Credit Sales Are Budgeted by Garcia Company The Company's Past Experience Indicates That 70% of the Accounts