Markham Company has completed its sales budget for the first quarter of 2014. Projected credit sales for the first four months of the year are shown below: $$\begin{array} { | l | l | }
\hline \text { January } & \$ 30,000 \
\hline \text { February } & \$ 36,000 \
\hline \text { March } & \$ 45,000 \
\hline \text { April } & \$ 48,000 \
\hline
\end{array}$$ 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:

Question

Markham Company has completed its sales budget for the first quarter of 2014. Projected credit sales for the first four months of the year are shown below: $$\begin{array} { | l | l | } 
\hline \text { January } & \$ 30,000 \
\hline \text { February } & \$ 36,000 \
\hline \text { March } & \$ 45,000 \
\hline \text { April } & \$ 48,000 \
\hline
\end{array}$$ 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:

Quizplus · Accepted Answer

In March, 40% of March sales ($45,000) are collected, which is $18,000. Additionally, 60% of February sales ($36,000) are collected, which is $21,600. Total cash collection in March is $18,000 + $21,600 = $39,600.

Markham Company Has Completed Its Sales Budget for the First