Schedule of Cash Collections of Accounts Receivable Pet Stop

Schedule of Cash Collections of Accounts Receivable

Pet Stop 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, 51% are expected to be collected in the month of the sale, 44% 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.

May	$170,000
June	220,000
July	330,000

Solution

PET STOP INC.

Schedule of Collections from Sales

For the Three Months Ending July 31

May

June

July

May sales on account:

Collected in May

86,700

-

-

Collected in June

-

74,800

-

Collected in July

-

-

8,500

June sales on account:

Collected in June

-

112,200

-

Collected in July

-

-

96,800

July sales on account:

Collected in July

-

-

168,300

Total cash collected

$86,700

$187,000

$273,600

May sales on account:

Collected in May = 170,000 x 51% = 86,700

Collected in June = 170,000 x 44% = 74,800

Collected in July = 170,000 x 5% = 8,500

June sales on account:

Collected in June = 220,000 x 51% = 112,200

Collected in July = 220,000 x 44% = 96,800

July sales on account:

Collected in July = 330,000 x 51% = 168,300

PET STOP INC.
Schedule of Collections from Sales
For the Three Months Ending July 31
	May	June	July
May sales on account:
Collected in May	86,700	-	-
Collected in June	-	74,800	-
Collected in July	-	-	8,500
June sales on account:
Collected in June	-	112,200	-
Collected in July	-	-	96,800
July sales on account:
Collected in July	-	-	168,300
Total cash collected	$86,700	$187,000	$273,600