In March, Cooper will receive the $18,000 of cash sales in March, $45,000 (50%) of the March credit sales of $90,000, $36,000 (30%) of the February credit sales of $120,000 and $20,000 (20%) of the January credit sales of $100,000. This totals $119,000.
This is the $18,000 of cash sales made in March plus 50% of February's credit sales plus 30% of January's credit sales. The collections from credit sales are 50% of March's credit sales, 30% of February's credit sales, and 20% of January's credit sales.
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On average, 50% of credit sales are paid for in the month of sale, 30% in the month following the sale, and the remainder is paid 2 months after the month of sale. Assuming there are no bad debts, the expected cash inflow for Cooper in March is: