Problem 1 Schedule of Cash Collections PetJoy Wholesale Inc

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: $340,000 430,000 610,000 March Apl May The company expects to sell 10% of its merchandise for cash. Of sales on account, 54% are expected to be collected n the month of the sale, 41% 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 March April May Recelipts 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 Previous Next

Solution

PetJoy Wholesale Inc. Schedule of Cash collections For the Three months ending May 31,2016 March April May Receipts for cash sales Cash Sales   10% of monthly sales 34000 43000 61000 March Sales on Account(340000*90%=306000) Collected in March (54%*306000) 165240 Collected in April (41%*306000) 125460 Collected in May(5%*306000) 15300 April Sales on Account(430000*90%=387000) Collected in April (54%*387000) 208980 Collected in May (41%*387000) 158670 May Sales on Account(610000*90%=549000) Collected in May (54%*549000) 296460 Total cash colllected 199240 377440 531430