Scenario: Dorough Pointers Inc. expects to begin operations on January 1, 2009; it will operate as a specialty sales company that sells laser points over the Internet. Dorough expects sales in January 2009 to total $120,000 and to increase 10 percent per month in February and March. All sales are on account. Dorough expects to collect 70 percent of accounts receivable in the month of sale, 20 percent in the month following the sale and 10 percent in the second month following the sale.
Q1. Prepare a sales budget for the first quarter of 2009.
Q2. Determine the amount of sales revenue Dorough will report on the first 2009 quarterly pro forma income statement.
Q3. Prepare a cash receipts schedule for the first quarter of 2009.
Q4. Determine the amount of accounts receivable as of March 31, 2009.