Pet mart wholesale inc., a pet wholesale supplier, was organized on march 1, 201

Question

Pet mart wholesale inc., a pet wholesale supplier, was organized on march 1, 2012. projected sales for each of the first three months of operations are as follows:

march........$90,000

april...........$150,000

may...........$240,000

the company expects to sell 10% of its merchandise for cash.  of sales on account, 50% are expected to be collected in the month of the sale, 35% in the month followingthe 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

Hi,

Please find the answer as follows:

Schedule of Cash Collections:

Thanks.

March April May Cash Sales 9000 15000 24000 Credit Sales Collected in the Same Month 40500 67500 108000 Credit Sales Collected in the Following Month 0 28350 47250 Credit Sales Collected in the Second Month 0 0 12150 Total Cash Collections 49500 110850 191400

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