PROBLEM 2 All sales of P Company are on account .

Budgeted sales for the

first quarter of 2008 are :
January 96,000
February 168,800
March 158,400

Based on the company's collection experience , 60% of sales is collected

in the month after the sale , 30% collected in the second month following
the sale, and the balance is uncollectible .

How much is the budgeted cash receipts for March ?

P 130,080

SOLUTION

Month Total Credit Sales Collection %age Calculations March

January 96000 36% 96000 X 30% 28,000
February 168800 60% 168800 X 60% 101,280
Total collection from customer in the month of March 130,080