Question

Schedule of Cash Collections

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	$170,000
April	240,000
May	350,000

The company expects to sell 10% of its merchandise for cash. Of sales on account, 51% are expected to be collected in the month of the sale, 44% 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

PetJoy Wholesale Inc.
Schedule of Cash Collections
For the Three Months Ending May 31, 2016
	March		April		May
Receipts from cash sales:
Cash sales	($170,000*10%)	$ 17,000.00	($240,000*10%)	$ 24,000.00	($350,000*10%)	$ 35,000.00
March sales on account:
Collected in March	($170,000*90%*51%)	$ 78,030.00
Collected in April			($170,000*90%*44%)	$ 67,320.00
Collected in May					($170,000*90%*5%)	$ 7,650.00
April sales on account:
Collected in April			($240,000*90%*51%)	$ 110,160.00
Collected in May					($240,000*90%*44%)	$ 95,040.00
May sales on account:
Collected in May					($350,000*90%*51%)	$ 160,650.00
Total cash collected		$ 95,030.00		$ 201,480.00		$ 298,340.00