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
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 |
