Folkes, Inc Has Prepared a Sales Budget for the Second $$\begin{array} { l c } & \text { Budgeted Sales } \\\text { April } & \$ 400,000 \\\text { May } & 500,000 \\\text { June } & 600,000\end{array}$$

Folkes, Inc has prepared a sales budget for the second quarter as shown below:
$$\begin{array} { l c } & \text { Budgeted Sales } \\\text { April } & \$ 400,000 \\\text { May } & 500,000 \\\text { June } & 600,000\end{array}$$
The company is in the process of preparing a cash budget for the second quarter. To this end, the following information has been assembled:
$$\begin{array} { l c } & \text { Collections on Sales } \\\text { In month of sale } &70 \%\\\text { In month following sale } & 25 \% \\\text { In second month following sale } &5\%\\\end{array}$$
The company gives a 1% cash discount to customers paying in the month of the sale. Records show past sales to be: January $300,000, February $340,000, and March $360,000.
Required:
Prepare a schedule of cash receipts for the third quarter.

Correct Answer:

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