Question

Schedule of Cash Collections of Accounts Receivable Pet Supplies Inc., a pet wholesale supplier, was organized on January 1, 2016. Projected sales for each of the first three months of operations are as follows: January $370,000 February 450,000 March 660,000 All sales are on account. 56% of sales are expected to be collected in the month of the sale, 40% 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.Pet Place Supplies Inc.

Schedule of Collections from Sales
For the Three Months Ending July 31, 2016
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

Correct

Step-by-step explanation:

Answer 2

Results are below.

Step-by-step explanation:

All sales are on account.

56% of sales are expected to be collected in the month of the sale

40% in the month following the sale

4% in the second month following the sale.

Cash Collection January:

Sales on account January= 370,000*0.56= $207,200

Total cash collection= $207,200

Cash Collection February:

Sales on account January= 370,000*0.44= $162,800

Sales on account February= 450,000*0.56= $252,000

Total cash collection= $414,800

Cash Collection March:

Sales on account January= 370,000*0.04= $14,800

Sales on account February= 450,000*0.44= $198,000

Sales on account March= 660,000*0.56= $369,600

Total cash collection= $582,400