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    Cash Collections for Firm Cash Budgets

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    Great Buy's sales are all made on account. The firm's collection experience has been that 20% of a month's sales are collected in the month of sale, 60% are collected in the month following the sale, and 18% are collected in the second month following the sale. The sales forecast for August through November is:


    Calculate the cash collections that would be included in the cash budgets for Oct. and Nov.

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    Solution Summary

    Detailed explanation is given that determines the cash collections for Great Buy's cash budgets for the months of October and November.