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: May June $310,000 420,000 560,000 July All sales are on account. Of sales on account, 51% are expected to be collected in the month of the sale, 45% 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. Pet Place Supplies Inc. Schedule of Cash Collections from Sales For the Three Months Ending July 31 May June July May sales on account: Collected in May $ Collected in June Collected in July June sales on account: Collected in June Collected in July July sales on account:

Answer 1

Pet place Supplies Inc
Schedule of cash collection from sales
For the three months Ending July 31
	May	June	July
Receipts from cash sales
May sales on account
Collected in May	$310,000*51% = $158,100
Collected in June		$310,000*45% = $139,500
Collected in July			$310,000*4% = $12,400
June sales on account
Collected in June		$420,000*51% = $214,200
Collected in July			$420,000*45% = $189,000
July sales on account
Collected in July			$560,000*51% = $285,600
Total cash receipts	$                                   158,100	$                                   353,700	$                                   487,000

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