Question - Schedule of cash collections of accounts receivable
Pet Joy Wholesale Inc., a pet wholesale supplier, was organized on May 1, 2010. Projected sales for each of the first three months of operations are as follows:
May $360,000
June 420,000
July 630,000
The company expects to sell 10% of its merchandise for cash. Of sales on account, 55% are expected to be collected in 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 May, June, and July.