Schedule of Cash Collections of Accounts Receivable Pet Supplies Inc., a pet wholesale supplier, was organized on January 1. Projected sales for each of the first three months of operations are as follows:
January $300,000
February 500,000
March 750,000
All sales are on account. Seventy-five percent of sales are expected to be collected in the month of the sale, 20% 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 January, February, and March. Enter all amounts as positive numbers.
| January | February | March | |
| January Sales on Account | |||
| Collected in January | $ | ||
| Collected in February | $ | ||
| Collected in March | $ | ||
| February Sales on Account | |||
| Collected in February | $ | ||
| Collected in March | $ | ||
| March Sales on Account | |||
| Collected in March | $ | ||
| Total Cash Collected | $ | $ | $ |
Ans.
Given:
statement showing sales on account
| Month | Amount($) |
| January | $300,000 |
| February | $500,000 |
| March | $750,000 |
Pet Supplies Inc. Schedule of Cash Collections from Sales For the Three Months Ending
| Particulars | January | February | March |
| January Sales on Account | |||
| Collected in January | $225,000 | ||
| Collected in February | $60,000 | ||
| Collected in March | $15,000 | ||
| February Sales on Account | |||
| Collected in February | $375,000 | ||
| Collected in March | $100,000 | ||
| March Sales on Account | |||
| Collected in March | $562,500 | ||
| Total Cash Collected | $225,000 | $435,000 | $677,500 |
Working :
Statement showing collection of cash for the month of January
| Particulars | collection (%) | Amount($) |
| Collection in January | 75% | = $300,000*75%= $225,000 |
| Collection in February | 20% | = $300,000*20%=$60,000 |
| Collection in March | 5% (Residual) | = $300,000*5%= $15,000 |
Statement showing collection of cash for the month of February
| Particulars | Collection (%) | Amount ($) |
| Collection in February | 75% | = $500,000*75%= $375,000 |
| Collection in March | 20% | = $500,000*20%= $100,000 |
Statement showing collection of cash for the month of March
| Particulars | Collection (%) | Amount ($) |
| Collection in March | 75% | = $750,000*75% =$562,500 |
Schedule of Cash Collections of Accounts Receivable Pet Supplies Inc., a pet wholesale supplier, was organized...