Rundle Pointers Corporation expects to begin operations on January 1, 2019; it w

Question

Rundle Pointers Corporation expects to begin operations on January 1, 2019; it will operate as a specialty sales company that sells laser pointers over the Internet. Rundle expects sales in January 2019 to total $220,000 and to increase 15 percent per month in February and March. All sales are on account. Rundle expects to collect 66 percent of accounts receivable in the month of sale, 24 percent in the month following the sale, and 10 percent in the second month following the sale. Required a. Prepare a sales budget for the first quarter of 2019 b. Determine the amount of sales revenue Rundle will report on the first 2019 quarterly pro forma income statement c. Prepare a cash receipts schedule for the first quarter of 2019. d. Determine the amount of accounts receivable as of March 31, 2019. Complete this question by entering your answers in the tabs below Required A Required B Required C Required D Prepare a sales budget for the first quarter of 2019 Sales Budget Sales on account January February March

Explanation / Answer

Solution a:

Solution b:

Amount of sales revenue to be reported on the first 2019 quarterly proforma income statement

= $220,000 + $253,000 + $290,050 = $763,950

Solution c:

Solution d:

Amount of account receivables as of March 31, 2019 = 34% of march sales + 10% of Februray sales

= ($290,950*34%) + ($253,000*10%) = $124,223

Sales Budget - Rundle Pointers Corporation Particulars January February March Sales on account
February - $220,000*115%
March - $253,000*115% $220,000.00 $253,000.00 $290,950.00

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