Watt’s Lighting Stores made the following sales projection for the next six months. All sales are credit sales.
Sales in January and February were $46,000 and $45,000, respectively. Experience has shown that of total sales, 10 percent are uncollectible, 35 percent are collected in the month of sale, 45 percent are collected in the following month, and 10 percent are collected two months after sale.
a. Prepare a monthly cash receipts schedule for
the firm for March through August.
|In month of sale|
|One month after sale|
|Two months after sale|
|Total cash receipts|
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