Markham Company has completed its sales budget for the first quarter of Year 2.Projected credit sales for the first four months of the year are shown below: $\begin{array}{lll}
\text { January } & \$ 30,000 \
\text { February } & \$ 36,000 \
\text { March } & \$ 45,000 \
\text { April } & \$ 48,000
\end{array}$ The company's past records show collection of credit sales as follows: 40% in the month of sale and the balance in the following month.The total cash collection from receivables in March is expected to be:
A) $18,000.
B) $45,000.
C) $41,400.
D) $39,600.

Question

Quizplus · Accepted Answer

The total cash collection from receivables in March is calculated by adding 40% of March sales (collected in March) to 60% of February sales (collected in March). For March, this is 40% of $45,000 plus 60% of $36,000, which equals $18,000 (from March sales) + $21,600 (from February sales) = $39,600.

Markham Company Has Completed Its Sales Budget for the First