Schedule of Cash Collections of Accounts Receivable Pet Place Supplies Inc., a p

Question

Schedule of Cash Collections of Accounts Receivable

Pet Place Supplies Inc., a pet wholesale supplier, was organized on May 1. Projected sales for each of the first three months of operations are as follows:

All sales are on account. 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 May, June, and July.

Explanation / Answer

Pet Place Supplies Inc. Schedule of Collections from Sales For the Three Months Ending July 31 May June July May sales on account: Collected in May 84000 Collected in June 60000 Collected in July 6000 June sales on account: Collected in June 89600 Collected in July 64000 July sales on account: Collected in July 128800 Total cash collected 84000 149600 198800

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