All of Gaylord Corporation's sales are on account. Thirty-five percent of the sales on account are collected in the month of sale, 45% in the month following sale, and the remainder are collected in the second month following sale. The following are budgeted sales data for the company:

All of Gaylord Corporation's sales are on account. Thirty-five percent of the sales on account are collected in the month of sale, 45% in the month following sale, and the remainder are collected in the second month following sale. The following are budgeted sales data for the company:

	January			February		March		April
Total sales	$50,000			$60,000		$40,000		$30,000

What is the amount of cash that should be collected in March?

Multiple Choice

• $51,000

  Correct
• $41,000
• $24,000
• $37,000

Explanation

March sales collected in March ($40,000 × 35%)	$	14,000
February sales collected in March ($60,000 × 45%)	$	27,000
January sales collected in March ($50,000 × 20%)	$	10,000
Total cash collections in March	$	51,000