Answer:
The amount of cash collected in March should be:
$51,000.
Explanation:
a) Data and Calculations:
Budgeted sales and Cash Collections:
January February March April
Total sales $50,000 $60,000 $40,000 $30,000
Collections:
35% month of sales 17,500 21,000 14,000 10,500
45% month following 22,500 27,000 18,000
20% second month 10,000
Total collections in March $51,000
b) The above calculations concentrated on the month of March, being the month of interest. Though, sales on account totals $40,000, the cash collections for the month amounts to $51,000. This arises from cash collections from the months of January and February.
