Question

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 $310,000 February 350,000 March 510,000 All sales are on account. 58% of sales are expected to be collected in the month of the sale, 37% 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.

Answer 1

Results are below.

Step-by-step explanation:

Giving the following information:

Sales:

January $310,000

February 350,000

March 510,000

58% of sales are expected to be collected in the month of the sale

37% in the month following the sale

5% in the second month following the sale

Cash collection January:

Cash from sales in account January= (310,000*0.58)= 179,800

Total cash collection= $179,800

Cash collection February:

Cash from sales in account January= (310,000*0.37)= 114,700

Cash from sales in account February= (350,000*0.58)= 203,000

Total cash collection= $317,700

Cash collection March:

Cash from sales in account January= (310,000*0.05)= 15,500

Cash from sales in account February= (350,000*0.37)= 129,500

Cash from sales in account March= (510,000*0.58)= 295,800

Total cash collection= $440,800