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. Enter all amounts as positive numbers.

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tanveermoledina tanveermoledina · Answer 1 · 2020-02-21T13:18:23+01:00

Answer:

Furry Friends Supplies Inc.

Cash collections Schedule

May June July

$ $ $

Collections for May sales 109,200 39,000 7,800

Collections for June sales 0 122,500 43,750

Collections for July sales 0 0 126,000

Total collections for the month 109,200 161,500 177,550

Explanation:

The collections in May represent 70 % of sales for May of $ 156,000

The collections in June represent 25 % of sales of May ($ 156,000) and 70 % of sales of June ( $ 175,000)

The collections in July represent 5 % of sales of May ( $156,000) 25 % of sales for June ($ 175,000) and 70 % of sales of July ( $ 180,000)