Question

Elwood Company projects the following sales for the first three months of the year: $12,400 in January; $10,200 in February; and $10,500 in March. The company expects 70% of the sales to be cash and the remainder on account. Sales on account are collected 50% in the month of the sale and 50% in the following month. The Accounts Receivable account has a zero balance on January 1. Round to the nearest dollar. Read the requirements. Requirement 1. Prepare a schedule of cash receipts for Elwood for January, February, and March. What is the balance in Accounts Receivable on March 31? (Leave unused and zero balance account cells blank, do not enter "O".) Cash Receipts from Customers January February March Total Total sales January February March Total i Requirements Cash Receipts from Customers: Accounts Receivable balance, January 1 January—Cash sales January-Credit sales, collection of January sales in January January-Credit sales, collection of January sales in February February—Cash sales February-Credit sales, collection of February sales in February February-Credit sales, collection of February sales in March 1. Prepare a schedule of cash receipts for Elwood for January, February, and March. What is the balance in Accounts Receivable on March 31? 2. Prepare a revised schedule of cash receipts if receipts from sales on account are 60% in the month of the sale, 30% in the month following the sale, and 10% in the second month following the sale. What is the balance in Accounts Receivable on March 31? Print Done March-Cash sales March-Credit sales, collection of March sales in March Total cash receipts from customers

Answer 1

1
	January	February	March	Total
Total sales	12400	10200	10500	33100
	January	February	March	Total
Cash Receipts from customers
Accounts Receivable balance, January 1
January-Cash sales	8680
January-Credit sales,collection of January sales in January	1860
January-Credit sales,collection of January sales in February		1860
February-Cash sales		7140
February-Credit sales,collection of February sales in February		1530
February-Credit sales,collection of February sales in March			1530
March-Cash sales			7350
March-Credit sales,collection of March sales in March			1575
Total cash receipts from customers	10540	10530	10455	31525
Accounts Receivable balance on March 31
March—Credit sales, collection of March sales in April	1575	=10500*30%*50%
2
	January	February	March	Total
Total sales	12400	10200	10500	33100
	January	February	March	Total
Cash Receipts from customers
Accounts Receivable balance, January 1
January-Cash sales	8680
January-Credit sales,collection of January sales in January	2232
January-Credit sales,collection of January sales in February		1116
January—Credit sales, collection of January sales in March			372
February-Cash sales		7140
February-Credit sales,collection of February sales in February		1836
February-Credit sales,collection of February sales in March			918
March-Cash sales			7350
March-Credit sales,collection of March sales in March			1890
Total cash receipts from customers	10912	10092	10530	31534
Accounts Receivable balance on March 31
Credit sales, collection in April and May	1566	=(10200*30%*10%)+(10500*30%*40%)
Formulas used:
1
	January	February	March
Cash Receipts from customers
Accounts Receivable balance, January 1
January-Cash sales	=12400*70%
January-Credit sales,collection of January sales in January	=12400*30%*50%
January-Credit sales,collection of January sales in February		=12400*30%*50%
February-Cash sales		=10200*70%
February-Credit sales,collection of February sales in February		=10200*30%*50%
February-Credit sales,collection of February sales in March			=10200*30%*50%
March-Cash sales			=10500*70%
March-Credit sales,collection of March sales in March			=10500*30%*50%
2
	January	February	March
Cash Receipts from customers
Accounts Receivable balance, January 1
January-Cash sales	=12400*70%
January-Credit sales,collection of January sales in January	=12400*30%*60%
January-Credit sales,collection of January sales in February		=12400*30%*30%
January—Credit sales, collection of January sales in March			=12400*30%*10%
February-Cash sales		=10200*70%
February-Credit sales,collection of February sales in February		=10200*30%*60%
February-Credit sales,collection of February sales in March			=10200*30%*30%
March-Cash sales			=10500*70%
March-Credit sales,collection of March sales in March			=10500*30%*60%