Question

Fur Family 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	$600,000
June	900,000
July	1,100,000

All sales are on account. Of sales on account, 60% are expected to be collected in the month of the sale, 30% in the first month following the sale, and the remainder in the second month following the sale.

Prepare a schedule indicating cash collections from sales for May, June, and July.

FUR FAMILY INC.
Schedule of Collections from Sales
For the Three Months Ending July 31
	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	$	$	$

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Answer 1

Answer
Schedule of Collections from Sales
	May	June	July
May sales on account (600000):
Collected in May	$      3,60,000
	(600000*60%)
Collected in June		$      1,80,000
		(600000*30%)
Collected in July			$           60,000
			(600000*10%)
June sales on account (900000):
Collected in June		$      5,40,000
		(900000*60%)
Collected in July			$        2,70,000
			(900000*30%)
July sales on account (1100000):
Collected in July			$        6,60,000
			(1100000*60%)
Total cash collected	$      3,60,000	$      7,20,000	$        9,90,000