Avril Company makes collections on sales according to the following schedule:

40% in the month of sale

55% in the month following sale

5% in the second month following sale

The following sales are expected:

	Expected Sales
January	$110,000
February	$120,000
March	$110,000

Cash collections in March should be budgeted to be:

	$110,000
	$110,550
	$115,500
	$110,000

Cash collections for March:

March credit sales collected in March ($110,000 × 40%)	$  44,000
February credit sales collected in March ($120,000 × 55%)	66,000
January credit sales collected in March ($110,000 × 5%)	5,500
Total cash collections in March	$115,500