Schedule of Cash Collections of Accounts Receivable PetJoy Wholesale Inc., a pet
ID: 2462895 • Letter: S
Question
Schedule of Cash Collections of Accounts Receivable
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 11% of its merchandise for cash. Of sales on account, 59% are expected to be collected in the month of the sale, 37% 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.
March $360,000 April 480,000 May 670,000Explanation / Answer
PetJoy Wholesale Inc.
Schedule of Collections from Sales
For the Three Months Ending May 31, 2016
March
April
May
Receipts from cash sales:
Cash sales
$ 39,600
$ 52,800
$ 73,700
(360000*11%)
(480000*11%)
(670000*11%)
March sales on account (360000*(1-11%) = 320400:
Collected in March (320400*59%)
$ 189,036
Collected in April (320400*37%)
$ 118,548
Collected in May (320400*4%)
$ 12,816
April sales on account (480000*(1-11%) = 427200:
Collected in April (427200*59%)
$ 252,048
Collected in May (427200*37%)
$ 158,064
May sales on account:(670000*(1-11%) = 596300:
Collected in May (596300*59%)
$ 351,817
Total cash collected
$ 228,636
$ 423,396
$ 596,397
PetJoy Wholesale Inc.
Schedule of Collections from Sales
For the Three Months Ending May 31, 2016
March
April
May
Receipts from cash sales:
Cash sales
$ 39,600
$ 52,800
$ 73,700
(360000*11%)
(480000*11%)
(670000*11%)
March sales on account (360000*(1-11%) = 320400:
Collected in March (320400*59%)
$ 189,036
Collected in April (320400*37%)
$ 118,548
Collected in May (320400*4%)
$ 12,816
April sales on account (480000*(1-11%) = 427200:
Collected in April (427200*59%)
$ 252,048
Collected in May (427200*37%)
$ 158,064
May sales on account:(670000*(1-11%) = 596300:
Collected in May (596300*59%)
$ 351,817
Total cash collected
$ 228,636
$ 423,396
$ 596,397
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