Question

Thornton Pointers Corporation expects to begin operations on January 1, 2019; it will operate as a specialty sales company that sells laser pointers over the Internet. Thornton expects sales in January 2019 to total $360,000 and to increase 15 percent per month in February and March. All sales are on account. Thornton expects to collect 68 percent of accounts receivable in the month of sale, 21 percent in the month following the sale, and 11 percent in the second month following the sale.

Prepare a sales budget for the first quarter of 2019.

Determine the amount of sales revenue Thornton will report on the first 2019 quarterly pro forma income statement.

Prepare a cash receipts schedule for the first quarter of 2019.

Determine the amount of accounts receivable as of March 31, 2019.

Sales Budget	January	February	March
Sales on account

Determine the amount of sales revenue Thornton will report on the first 2019 quarterly pro forma income statement.

	Sales revenue

Prepare a cash receipts schedule for the first quarter of 2019. (Do not round intermediate calculations. Round final answers to whole dollars.)

Schedule of Cash Receipts	January	February	March
Receipts from January sales
Receipts from February sales
Receipts from March sales
Total

Determine the amount of accounts receivable as of March 31, 2019. (Do not round intermediate calculations. Round final answers to whole dollars.)

	Accounts receivable

Answer 1

Req 1.
Sales budget
			January	February	March
Sales on account			360000	414000	476100
Req 2.
Total sales revenue for Quarter (360000+414000+476000):					1250000
Req 3.
Schedule of cash receipts
			January	February	March
Receipts of Jan sales			244800	75600	39600
Receipt of Feb sales			0	281520	39600
Receipt of march sales			0	0	269892
Total			244800	357120	349092
Available receivable as on Mar31:
Feb Sales receivable (414000*11%):			45540
March sales receivable (476100*32%):			152352
Accounts receivable as on Mar 31:			197892