Schedule of Cash Collections PetJoy Wholesale Inc., a pet wholesale supplier, was organized on March 1,...

Schedule of Cash Collections

PetJoy Wholesale Inc., a pet wholesale supplier, was organized on March 1, 2016. Projected sales for each of the first three months of operations are as follows:

March	$150,000
April	160,000
May	240,000

The company expects to sell 10% of its merchandise for cash. Of sales on account, 56% 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 March, April, and May.

PetJoy Wholesale Inc.
Schedule of Cash Collections
For the Three Months Ending May 31, 2016
	March	April	May
Receipts from cash sales:
Cash sales	$	$	$
March sales on account:
Collected in March
Collected in April
Collected in May
April sales on account:
Collected in April
Collected in May
May sales on account:
Collected in May
Total cash collected	$	$	$

Solutions

Expert Solution



	Working Note

	Sales		150000	160000	240000
	Cash sales=10% of total sales		15000	16000	24000
	Credit sales=90% of total sales		135000	144000	216000

	PetJoy Wholesale Inc.
	Schedule of cash collections
	For the three months ending May 31, 2016

			March	April	May
			$	$	$
	Receipts from cash sales
		Cash Sales	15000	16000	24000

	March Sales on account
		Collected in March(56%)	75600
		Collected in April(40%)		54000
		Collected in May(Remaining 4%)			5400

	April Sales on account
		Collected in April(56%)		80640
		Collected in May(40%)			57600

	May Sales on account
		Collected in May(56%)			120960

	Total Cash collected		90600	150640	207960


If above presentation does not fit into answer, please try the alternative presentation as given below


	PetJoy Wholesale Inc.
	Schedule of cash collections
	For the three months ending May 31, 2016

			March	April	May
			$	$	$
	Receipts from cash sales
		Cash Sales	15000	16000	24000

	March Sales on account
		Collected in March(56%)	75600
		Collected in April(40%)	54000
		Collected in May(Remaining 4%)	5400

	April Sales on account
		Collected in April(56%)		80640
		Collected in May(40%)		57600

	May Sales on account
		Collected in May(56%)			120960

	Total Cash collected		150000	154240	144960

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ekkarill92 answered 1 year ago

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