Schedule of Cash Collections of Accounts Receivable Furry Friends Supplies Inc.,

Question

Schedule of Cash Collections of Accounts Receivable

Furry Friends Supplies 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. Seventy percent of sales are expected to be collected in the month of the sale, 25% 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 May, June, and July. Enter all amounts as positive numbers.

May $156,000 June 175,000 July 180,000

Explanation / Answer

Prepare a schedule indicating cash collections from sales for May, June, and July.

May June July May sales on account:
Collected in May 109200 Collected in June 39000 Collected in July 7800 June sales on account: Collected in June 122500 Collected in July 43750 July sales on account: Collected in july 126000 Total cash collected 109200 161500 177550

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