Question

Schedule of Cash Collections of Accounts Receivable

Pet Supplies Inc., a pet wholesale supplier, was organized on January 1. Projected sales for each of the first three months of operations are as follows:

January	$230,000
February	350,000
March	530,000

All sales are on account. 57% of sales are expected to be collected in the month of the sale, 38% 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 January, February, and March.

Pet Supplies Inc.
Schedule of Cash Collections from Sales
For the Three Months Ending March 31
	January	February	March
January sales on account:
Collected in January	$
Collected in February		$
Collected in March			$
February sales on account:
Collected in February
Collected in March
March sales on account:
Collected in March
Total cash collected	$	$	$

Answer 1

Schedule of expected cash collections
	January	February	March
January sales on account
Collected in January (57% X $230000)	$ 1,31,100
Collected in February (38% X $230000)		$         87,400
Collected in March (5% X $230000)			$     11,500
February sales on account
Collected in February (57% x $350000)		$      1,99,500
Collected in March (38% x $350000)			$ 1,33,000
March sales on account
Collected in March (57% X $530000)			$ 3,02,100
Total cash receipts	$ 1,31,100	$      2,86,900	$ 4,46,600

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