Question

Eastern Auto Parts Inc. has 30 percent of its sales paid for in cash and 70 percent on credit. All credit accounts are collected in the following month.
  
Assume the following sales:
  

January	$	76,000
February		66,000
March		111,000
April		56,000

Sales in December of the prior year were $86,000.

Prepare a cash receipts schedule for January through April

Sales

cash receipts

cash sales

prior months credit sales

total cash receipts

Answer 1

Ans.	EASTERN AUTO PARTS INC.
	Schedule of Cash Receipts
	For January through April
		January	February	March	April
	Sales	$76,000	$66,000	$111,000	$56,000
	Cash receipts:
	Cash sales	$22,800	$19,800	$33,300	$16,800
	Prior month's credit sales	$60,200	$53,200	$46,200	$77,700
	Total cash receipts	$83,000	$73,000	$79,500	$94,500
	*Cash sales   =    30% of total sales
		December	January	February	March	April
	Calculation of cash sales	$86,000 * 30%	$76,000 * 30%	$66,000 * 30%	$111,000 * 30%	$56,000 * 30%
	Cash sales	$25,800	$22,800	$19,800	$33,300	$16,800
	*Credit sales   = 70% of total sales
		December	January	February	March	April
	Calculation of credit sales	$86,000 * 70%	$76,000 * 70%	$66,000 * 70%	$111,000 * 70%	$56,000 * 70%
	Credit sales	$60,200	$53,200	$46,200	$77,700	$39,200
	*Current month's credit sales will receive in the next month or previous month's credit sales will receive in current month.
	*December month's credit sales will receive in January.