Question

Schedule of Cash Collections of Accounts Receivable

Bark & Purr 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	$184,000
June	192,000
July	201,000

All sales are on account. Sixty percent of sales are expected to be collected in the month of the sale, 35% 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.

Bark & Purr Supplies Inc.
Schedule of Collections from Sales
For the Three Months Ending July 31
	May	June	July
May sales on account:
Collected in May	$fill in the blank 1
Collected in June		$fill in the blank 2
Collected in July			$fill in the blank 3
June sales on account:
Collected in June		fill in the blank 4
Collected in July			fill in the blank 5
July sales on account:
Collected in July			fill in the blank 6
Total cash collected	$fill in the blank 7	$fill in the blank 8	$fill in the blank 9

2)

Schedule of Cash Payments for a Service Company

Oakwood Financial Inc. was organized on February 28. Projected selling and administrative expenses for each of the first three months of operations are as follows:

March	$59,600
April	66,400
May	72,300

Depreciation, insurance, and property taxes represent $7,000 of the estimated monthly expenses. The annual insurance premium was paid on February 28, and property taxes for the year will be paid in June. Sixty percent of the remainder of the expenses are expected to be paid in the month in which they are incurred, with the balance to be paid in the following month.

Prepare a schedule indicating cash payments for selling and administrative expenses for March, April, and May.

Oakwood Financial Inc.
Schedule of Cash Payments for Selling and Administrative Expenses
For the Three Months Ending May 31
	March	April	May
March expenses:
Paid in March	$fill in the blank 1
Paid in April		$fill in the blank 2
April expenses:
Paid in April		fill in the blank 3
Paid in May			$fill in the blank 4
May expenses:
Paid in May			fill in the blank 5
Total cash payments	fill in the blank 6	$fill in the blank 7	$fill in the blank 8

Answer 1

Part 1

Particulars	May	june	july
May sales on account
Collected in may	184000*60% = 110400
Collected in june		184000*35% = 64400
Collected in july			184000*5% =9200
June sales on account
Collected in june		192000*60% =115200
Collected in july			192000*35% =67200
July sales on account
Collected in july			201000*60% =120600
Total cash collected	110400	179600	197000

Part 2

Particulars	March	April	may
March expense
Paid in march	52600*60% =31560
Paid in april		52600*40% =21040
April Expense
Paid in april		59400*60% =35640
Paid in May			59400*40% =23760
May Expense
Paid in May			65300*60% =39180
Total Cash Payment	31560	56680	62940