27th Edition
WARREN + 5 others
ISBN: 9781337272094




27th Edition
WARREN + 5 others
ISBN: 9781337272094
Textbook Problem

Schedule of cash collections of accounts receivable

Furry Friends 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 $156,000
June 175,000
July 180,000

All sales are on account. Seventy percent of sales are expected to be collected in the month of the sale, 25% 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.

To determine

Budgeting is a process to prepare the financial statement by the manager to estimate the organization’s future actions. It is also helpful to satisfy the everyday activities.

To Prepare: The schedule of collections from sales of Company F.


The following table shows the schedule of collections from sales.

F Company
Schedule of Collections from Sales
For the three months ending July 31
Particulars May ($) June ($) July ($)
May sales on account:    
   Collected in May ($156,000 × 70%) 109,200  
Collected in June ($156,000 × 25%)   39,000  
Collected in July ($156,000 × 5%)

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