Jackson Company has developed the following sales projections for the calendar year:
$$\begin{array} { | l r | }
\hline \text { May } & \$ 100,000 \
\hline \text { June } & 120,000 \
\hline \text { Juby } & 140,000 \
\hline \text { August } & 160,000 \
\hline \text { September } & 150,000 \
\hline \text { October } & 130,000 \
\hline
\end{array}$$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: 
$$\begin{array} { | l r | } 
\hline \text { May } & \$ 100,000 \
\hline \text { June } & 120,000 \
\hline \text { Juby } & 140,000 \
\hline \text { August } & 160,000 \
\hline \text { September } & 150,000 \
\hline \text { October } & 130,000 \
\hline
\end{array}$$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

To find the budgeted cash collections for the third calendar quarter, we need to calculate the sales for each month first. 
For July: 
Sales = $400,000 
Cash collected in July = 50% of sales = $200,000 
For August: 
Sales = $350,000 
Cash collected in August = 45% of sales = $157,500 
For September: 
Sales = $300,000 
Cash collected in September = 45% of sales = $135,000 
Total cash collected in the third quarter = $200,000 + $157,500 + $135,000 = $492,500 
However, 5% of sales are never collected, so we need to subtract that from the total: 
$492,500 - 5% of ($400,000 + $350,000 + $300,000) = $492,500 - $52,500 = $440,000 
Therefore, the correct answer is C) $414,000.

Jackson Company Has Developed the Following Sales Projections for the Calendar