Stuart Pointers Corporation expects to begin operations on January 1, year 1; it will operate as...

Stuart Pointers Corporation expects to begin operations on January 1, year 1; it will operate as a specialty sales company that sells laser pointers over the Internet. Stuart expects sales in January year 1 to total $260,000 and to increase 10 percent per month in February and March. All sales are on account. Stuart expects to collect 68 percent of accounts receivable in the month of sale, 25 percent in the month following the sale, and 7 percent in the second month following the sale.

Required

Prepare a sales budget for the first quarter of year 1.
Determine the amount of sales revenue Stuart will report on the year 1 first quarterly pro forma income statement.
Prepare a cash receipts schedule for the first quarter of year 1.
Determine the amount of accounts receivable as of March 31, year 1.

Prepare a sales budget for the first quarter of year 1.

Sales Budget	January	February	March
Sales on account	$260,000

Determine the amount of sales revenue Stuart will report on the year 1 first quarterly pro forma income statement.

Sales revenue

Prepare a cash receipts schedule for the first quarter of year 1. (Do not round intermediate calculations. Round your final answers to the nearest whole dollar.

Schedule of Cash Receipts	January	February	March
Receipts from January sales
Receipts from February sales
Receipts from March sales
Total	$0	$0	$0

Determine the amount of accounts receivable as of March 31, year 1. (Do not round intermediate calculations. Round your final answers to the nearest whole dollar.)

Accounts receivable

Solutions

Expert Solution

Prepare a sales budget for the first quarter of year 1.

Sales Budget	January	February	March
Sales on account	$260,000	260000*1.1 = 286000	286000*1.1 = 314600

Determine the amount of sales revenue Stuart will report on the year 1 first quarterly pro forma income statement.

Sales revenue

860600

Prepare a cash receipts schedule for the first quarter of year 1. (Do not round intermediate calculations. Round your final answers to the nearest whole dollar.

Schedule of Cash Receipts	January	February	March
Receipts from January sales	176800	65000	18200
Receipts from February sales		194480	71500
Receipts from March sales			213928
Total	176800	259480	303628

Determine the amount of accounts receivable as of March 31, year 1. (Do not round intermediate calculations. Round your final answers to the nearest whole dollar.)

Accounts receivable

(286000*7%+314600*32%) = 120692

ekkarill92 answered 1 year ago

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