Question

Schedule of Cash Collections of Accounts Receivable

Pet Place 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:

May	$280,000
June	410,000
July	570,000

All sales are on account. Of sales on account, 55% are expected to be collected in the month of the sale, 40% 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.

Pet Place Supplies Inc.
Schedule of Cash Collections from Sales
For the Three Months Ending July 31
	May	June	July
May sales on account:
Collected in May	$?
Collected in June		$?
Collected in July			$?
June sales on account:
Collected in June		?
Collected in July			?
July sales on account:
Collected in July			?
Total cash collected	$?	$?	$?

Answer 1

Pet Place Supplies Inc.
Schedule of cash collections from sales
For the three months ending July 31
	May	June	July
May sales on account :
Collected in May [ 55%*280000 ]	154000
Collected in June [ 40%*280000 ]		112000
Collected in July [ 5%*280000 ]			14000
June sales on account :
Collected in June [ 55%*410000 ]		225500
Collected in July [ 40%*410000 ]			164000
July sales on account :
Collected in July [ 55%*570000 ]			313500
Total cash collected	154000	337500	491500