Question

Schedule of Cash Collections of Accounts Receivable Furry Friends 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 $270,000 June 410,000 July 600,000 All sales are on account. 59 percent of sales are expected to be collected in the month of the sale, 29% 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. Furry Friends Supplies Inc. Schedule of Collections from Sales For the Three Months Ending May 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

Solution:

Furry Friends Supplies Inc.
Schedule of Collection from sales
For Three months
	May	June	July
May Sales on Account:
Collected in May (59% of $270,000)	$1,59,300
Collected in June (29% of $270,000)		$78,300
Collected in July (12% of $270,000)			$32,400
June Sales on Account:
Collected in June (59% of $410,000)		$2,41,900
Collected in July (29% of $410,000)			$1,18,900
July Sales on Account:
Collected in July (59% of $600,000)			$3,54,000
Total Cash Collected	$1,59,300	$3,20,200	$5,05,300