ABC Company began operations on January 1, 2018. It makes all sales on account and expects the following collection pattern: 30% are collected in the month of the sale; 60% are collected in the first month after the sale and 10% are collected in the second month after the sale. Of budgeted sales for January, February, and March were $20,000, $60,000, and $70,000, respectively, what were the firm's budgeted collections for March

The firm's budgeted collections for March is $64,000

Explanation:

For collecting the firm's budgeted collections for march, the computation is shown below:

30% are collected in the month of the sale:

= 30% of March sale

= 30 * $70,000

= $21,000

60% are collected in the first month after the sale:

It means the calculations based on February month

= 60% * $60,000

=$36,000

10% are collected in the second month after the sale:

It means the calculations based on January month

= 10% * $70,000

= $7,000

Now, add these three month sales which equals to

= $21,000 + $36,000 + $7,000

= $64,000

Hence, the firm's budgeted collections for March is $64,000