James,Incmakes a Product That Has Peak Sales in September of Each

James,Inc.makes a product that has peak sales in September of each year.The company has prepared a sales budget for the third quarter as shown below:

$$\begin{array} { | l | r | } \hline & \text { Budgeted Sales } \\\hline \text { July } & \$ 200,000 \\\hline \text { August } & 400,000 \\\hline \text { September } & 600,000 \\\hline\end{array}$$
The company is in the process of preparing a cash budget for the third quarter and must determine the expected cash collections by month.To this end,the following information has been assembled: $$\begin{array} { | l | r | } \hline & \text { Colections on Sales } \\\hline \text { In month of sale } & 60 \% \\\hline \text { In month tollowing sale } & 25 \% \\\hline \text { In second month following } \\\text { sale } & 15 \% \\\hline\end{array}$$
The company gives a 3% cash discount to customers paying in the month of their sale.The company charges 2% interest to customers who pay in the second month following their sales.The accounts receivable balance to start the quarter is $150,000: $35,000 from May's sales and $115,000 from June's sales.Required:
Prepare a cash receipts budget for the third quarter.

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