Chapter 9, Problem 9.28AE

Cash collections budget (Learning Objective 3)

Holiday Corporation has found that 60% of its sales in any given month are credit sales, while the remainder are cash sales. Of the credit sales, Holiday Corporation has experienced the following collection pattern:

25% received in the month of the sale

50% received in the month after the sale

16% received two months after the sale

9% of the credit sales are never received

November sales for last year were $90,000, while December sales were $115,000. Projected sales for the next three months are as follows:

January sales	$145,000
February sales	$125,000
March sales	$180,000

Requirement

Prepare a cash collections budget for the first quarter, with a column for each month and for the quarter.