Question

Exercise 14-3 Preparing a schedule of cash receipts LO 14-2

The budget director of Heather’s Florist has prepared the following sales budget. The company had $270,000 in accounts receivable on July 1. Heather’s Florist normally collects 100 percent of accounts receivable in the month following the month of sale.

Required

1. Complete the schedule of cash receipts by filling in the missing amounts.
2. Determine the amount of accounts receivable the company will report on its third quarter pro forma balance sheet.

Complete this question by entering your answers in the tabs below. Required A Required B Complete the schedule of cash receipts by filling in the missing amounts. July August September $ 79,000 95,000 $ 174,000 $ 81,000 115,000 $ 196,000 $ 78,000 120,600 $ 198,600 Sales Budget Cash sales Sales on account Total budgeted sales Schedule of Cash Receipts Current cash sales Plus: Collections from accounts receivable Total budgeted collections $ 349,000 $ 176,000 $ 193,000 Required A Required B > Complete this question by entering your answers in the tabs below. Required A Required B Determine the amount of accounts receivable the company will report on its third quarter pro forma balance sheet. Accounts receivable < Required A Required B )

Answer 1

Required A Statement of amount collected from account receivable Month Credit sale July August September 95,000 95,000 1,15,000 1,20,600 1,15,000 July Aug September Total amount collected Current Cash Sales Plus:Collections from Accounts Receivable Total Budgeted Collections Collection from account receivable = Total budgted collection - Cash sales of that month Ex: July (349,000-79,000) = 270,000 Nill 95,000 1,15,000 79,000 81,000 78,000 2,70,000 95,000 1,15,000 3,49,000 1,76,000 1,93,000 Required B As the question suggests, that the amount of credit sale will be collected in the next month. Total account receivable balance for the third quarter will be the uncollected amount of September i.e 120,600