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Expected cash collections

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All of Gaylord Company's sales are on account. Thirty-five percent of the credit sales are collected in the month of sale, 45% in the month following sale, and the rest are collected in the second month following sale. Bad debts are negligible and should be ignored. 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?

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This provides the steps to calculate the Expected cash collections

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March collections= 35%*40000+45%*60000+20%*50000
= 35%*40000+45%*60000+20%*50000
=$51000

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