Schedule of Cash Collections PetJoy Wholesale Inc., a pet wholesale supplier, wa

Question

Schedule of Cash Collections

PetJoy Wholesale Inc., a pet wholesale supplier, was organized on March 1, 2016. Projected sales for each of the first three months of operations are as follows:

The company expects to sell 10% of its merchandise for cash. Of sales on account, 56% are expected to be collected in the month of the sale, 40% in the month following the sale, and the remainder in the second month following the sale.

Prepare a schedule indicating cash collections from sales for March, April, and May.

Explanation / Answer

Working Note Sales 150000 160000 240000 Cash sales=10% of total sales 15000 16000 24000 Credit sales=90% of total sales 135000 144000 216000 PetJoy Wholesale Inc. Schedule of cash collections For the three months ending May 31, 2016 March April May $ $ $ Receipts from cash sales Cash Sales 15000 16000 24000 March Sales on account Collected in March(56%) 75600 Collected in April(40%) 54000 Collected in May(Remaining 4%) 5400 April Sales on account Collected in April(56%) 80640 Collected in May(40%) 57600 May Sales on account Collected in May(56%) 120960 Total Cash collected 90600 150640 207960 If above presentation does not fit into answer, please try the alternative presentation as given below PetJoy Wholesale Inc. Schedule of cash collections For the three months ending May 31, 2016 March April May $ $ $ Receipts from cash sales Cash Sales 15000 16000 24000 March Sales on account Collected in March(56%) 75600 Collected in April(40%) 54000 Collected in May(Remaining 4%) 5400 April Sales on account Collected in April(56%) 80640 Collected in May(40%) 57600 May Sales on account Collected in May(56%) 120960 Total Cash collected 150000 154240 144960 If you find this answer useful, Please do rate it. Thank You

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