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Question - Teddy Bear Company forecasts to begin business on January 1, Year 1. Teddy has forecasted the following sales budget for the first quarter of Year 1:
January
February
March
First Quarter
Budgeted Sales
$200,000
$250,000
$300,000
$750,000
Teddy wants to forecast monthly cash collections based on the following estimates:
Collections on account:
70% in the month of sale
20% in the month following sale
6% in the second month following sale
Uncollectible accounts have averaged 4% of receivables. The company gives a 2% discount for payments made by customers during the month of sale. How much cash will be collected in March?
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