Kevin Limited owns a retail store that sells new and used sporting equipment. Recently the managing director Kevin is concerned about the cash flow situation of the company. He has asked his management accountant to prepare cash budget in order to look at future cash requirements for the company. Kevin provides the following information.
1. Kevin Limited has a sales budget for March of $440,000. About 10% are cash sales and the remainder is sold on account.
2. The company expects that 60% of credit sales will be collected in the month of the sale, 25% in the next month and 10% in the following month.

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