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The sales budget of Mulls Company for the fourth quarter of 2009 is as follows
Sales
October
November
December
$96,000
$72,000
$108,000
Sales are 20% cash (20% of 108,000 is 21,600) and 80% credit (accounts receivable).
Collections on credit sales are as follows:
50% in the month of sale
30% in the month following sales
15% in the second month following sale
5 % uncollectible
Payments for inventory are 70% in the month following purchase and 30% two months following purchase.
Compute the cash collections for December
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