Najimi Enterprises recerty began seling on internet Internet sales for the fourt

Question

Najimi Enterprises recerty began seling on internet Internet sales for the fourth quarter of Year 1 totaled $600,000 The compary's internet sales are expected to grow atarae of 20% An salesare made on account The compan's collection experience is that 70% of accounts receivable will be collected 'n the quarter of sale and 25% in theet-trFre peat ofmeeln are written off during the quarter folliowing the quarter of sale. The balance in accounts receivable at the end of December Year 1 was $180,000 Required a) Prepare a sales budget for internet sales for the four quarters of Yer 2, include a t b) Compute the accounts receivable balance as of the end of Year l Prepare acash receipts schedule for all tour quarters of Year 2 and theyer as a otal column thait showstotal buteted internet sales tor the yew whole

Explanation / Answer

a) Sales budget :

b) Account receivable balance at the end of year 2 = 1036800*25% = 259200

c) Cash receipt schedule :

1st quarter 2nd quarter 3rd quarter 4th quarter Sales 600000 600000*1.20 = 720000 720000*1.2 = 864000 864000*1.2 = 1036800

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