Question

PetJoy Wholesale Inc., a pet wholesale supplier, was organized on March 1, 2016. Projected sales for each of the first three months of operations are as follows: March $390,000 April 550,000 May 750,000 The company expects to sell 10% of its merchandise for cash. Of sales on account, 55% are expected to be collected in the month of the sale, 41% 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 March, April, and May. PetJoy Wholesale Inc. Schedule of Cash Collections For the Three Months Ending May 31, 2016 March April May Receipts from cash sales: Cash sales $ $ $ March sales on account: Collected in March Collected in April Collected in May April sales on account: Collected in April Collected in May May sales on account: Collected in May Total cash collected $ $ $

Answer 1

Solution - Schedule of cash collection

PetJoy Wholesale Inc.

Cash Collection Schedule

For the Months of March, April and May

Particulars	March	April	May
Cash sales collection (10%)	$39000 ($390000*10%)	$55000 ($550000*10%)	$75000 ($750000*10%)
Cash Collected on sales on account (90%)
March Month Sales Collection
Collection in March (55%)	$193050 ($390000*90%*55%)
Collection in April (41%		$143910 ($390000*90%*41%)
Collection in May (4%)			$14040 ($390000*90%*4%)
April Month Sales collection
Collection in april (55%)		$272250 ($550000*90*55%)
Collection in May (41%)			$202950 ($550000*90%*41%)
May Month sales collection
Collection in May (55%)			$371250 ($750000*90%*55%)
Total	$232050	$471160	$663240