Question

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	$280,000
June	390,000
July	510,000

All sales are on account. 59 percent of sales are expected to be collected in the month of the sale, 31% 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

WORKING NOTES:
	SCHEDULE OF THE CASH RECEIPT FOR THE MONTH OF MAY, JUNE & JULY
	PARTICULARS	MAY	JUNE	JULY
	Sales On Account	$         2,80,000	$           3,90,000	$           5,10,000
	59% Expected to collect in the same month	$         1,65,200	$           2,30,100	$           3,00,900
	31% in the month following the sale		$               86,800	$           1,20,900
	10% in second month following the sales			$               28,000
		$         1,65,200	$           3,16,900	$           4,49,800
SOLLUTION:
	SCHEDULE OF COLLECTION FROM SALES	MAY	JUNE	JULY
	Sales	$         2,80,000	$           3,90,000	$           5,10,000
	May sales on account:
	Collected in May	$         1,65,200
	Collected in June		$               86,800
	Collected in July			$               28,000
	June sales on account:
	Collected in June		$           2,30,100
	Collected in July			$           1,20,900
	July sales on account:
	Collected in July			$           3,00,900
	Total Cash Collected	1,65,200	3,16,900	4,49,800