Question

Pet Place 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$134,000June155,000July169,000All sales are on account. Sixty-five percent of sales are expected to be collected in the month of the sale, 30% in the month following the sale, and the remainder in the second month fol-lowing the sale.Prepare a schedule indicating cash collections from sales for May, June, and July

Answer 1

Pet Place Supplies Inc.

Schedule of Cash from Sales for May, June, and July:

May June July

Cash collections:

60% month of sale $80,400 $93,000 $101,400

30% ffg month of sale 40,200 46,500

10% second month 13,400

Total cash collections $80,400 $133,200 $161,300

Step-by-step explanation:

a) Data and Calculations:

May June July

Projected credit sales $134,000 $155,000 $169,000

Cash collections:

60% month of sale $80,400 $93,000 $101,400

30% ffg month of sale 40,200 46,500

10% second month 13,400

Total cash collections $80,400 $133,200 $161,300