Schedule of Cash Collections of Accounts Receivable Pet Stop Inc., a pet wholesa
ID: 2396517 • Letter: S
Question
Schedule of Cash Collections of Accounts Receivable
Pet Stop Inc., a pet wholesale supplier, was organized on May 1. Projected sales for each of the first three months of operations are as follows:
All sales are on account. Of sales on account, 51% are expected to be collected in the month of the sale, 44% in the first month following the sale, and the remainder in the second month following the sale.
Prepare a schedule indicating cash collections from sales for May, June, and July.
May $170,000 June 220,000 July 330,000Explanation / Answer
PET STOP INC.
Schedule of Collections from Sales
For the Three Months Ending July 31
May
June
July
May sales on account:
Collected in May
86,700
-
-
Collected in June
-
74,800
-
Collected in July
-
-
8,500
June sales on account:
Collected in June
-
112,200
-
Collected in July
-
-
96,800
July sales on account:
Collected in July
-
-
168,300
Total cash collected
$86,700
$187,000
$273,600
May sales on account:
Collected in May = 170,000 x 51% = 86,700
Collected in June = 170,000 x 44% = 74,800
Collected in July = 170,000 x 5% = 8,500
June sales on account:
Collected in June = 220,000 x 51% = 112,200
Collected in July = 220,000 x 44% = 96,800
July sales on account:
Collected in July = 330,000 x 51% = 168,300
PET STOP INC.
Schedule of Collections from Sales
For the Three Months Ending July 31
May
June
July
May sales on account:
Collected in May
86,700
-
-
Collected in June
-
74,800
-
Collected in July
-
-
8,500
June sales on account:
Collected in June
-
112,200
-
Collected in July
-
-
96,800
July sales on account:
Collected in July
-
-
168,300
Total cash collected
$86,700
$187,000
$273,600
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