Zachary Pointers Corporation expects to begin operations on January 1, 2019; it
ID: 2590949 • Letter: Z
Question
Zachary 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. Zachary expects sales in January 2019 to total $280,000 and to increase 15 percent per month in February and March. All sales are on account. Zachary expects to collect 68 percent of accounts receivable in the month of sale, 23 percent in the month following the sale, and 9 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 Zachary 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.
Explanation / Answer
1.
Jan, 2019
Feb, 2019
March, 2019
Sales
280,000
322,000
(280,000+15%)
370,300
(322,000+15%)
2.
Total revenue for First 2019 quarter = Sale of Jan + Feb + March
= 280,000 + 322,000 + 370,300
Total revenue for First 2019 quarter = 972,300
3.
Jan, 2019
Feb, 2019
March, 2019
Sales
280,000
322,000
(280,000+15%)
370,300
(322,000+15%)
Cash Received:
Jan
190,400
(280,000*68%)
64,400
(280,000*23%)
25,200
(280,000*9%)
Feb
218,960
(322,000*68%)
74,060
(322,000*23%)
March
251,804
(370,300*68%)
Total
190,400
283,360
351,064
4.
Accounts receivable at the end of March, 2019
= 9% of Feb + 32% (23+9) of March
= (322,000*9%) + (370,300*32%)
Accounts receivable at the end of March, 2019 = 147,476
Jan, 2019
Feb, 2019
March, 2019
Sales
280,000
322,000
(280,000+15%)
370,300
(322,000+15%)
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