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Problem
Schedule of Cash Collections of Accounts Receivable
Pet Joy Wholesale Inc., a pet wholesale supplier, was organized on March 1. Projected sales for each of the first three months of operations are as follows:
March $340,000April 370,000May 490,000
The company expects to sell 11% of its merchandise for cash. Of sales on account, 56% are expected to be collected in the month of the sale, 39% 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.
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