1 answer

Sutton Pointers Corporation expects to begin operations on January 1, 2015; it will operate as a...

Question:

Sutton Pointers Corporation expects to begin operations on January 1, 2015; it will operate as a specialty sales company thatc. Prepare a cash receipts schedule for the first quarter of 2015. (Do not round intermediate calculations. Round your answer

Sutton Pointers Corporation expects to begin operations on January 1, 2015; it will operate as a specialty sales company that sells laser pointers over the Internet. Sutton expects sales in January 2015 to total $370,000 and to increase 15 percent per month in February and March. All sales are on account. Sutton expects to collect 69 percent of accounts receivable in the month of sale, 20 percent in the month following the sale, and 11 percent in the second month following the sale. Required a. Prepare a sales budget for the first quarter of 2015. Sales Budget January February March Sales on account b. Determine the amount of sales revenue Sutton will report on the first 2015 quarterly pro forma income statement. Sales revenue
c. Prepare a cash receipts schedule for the first quarter of 2015. (Do not round intermediate calculations. Round your answers to the nearest whole dollar amount.) January February March Schedule of Cash Receipts Receipts from January sales Receipts from February sales Receipts from March sales Total $ 0 $ 0 $ 0 d. Determine the amount of accounts receivable as of March 31, 2015. (Do not round intermediate calculations. Round your answers to the nearest whole dollar amount.) Accounts receivable

Answers

a) Sales budget

January February March
Sales on account 370000 370000*1.15 = 425500 425500*1.15 = 489325

b) Total Sales revenue = 370000+425500+489325 = 1284825

c) Schedule of cash collection

January February March
Receipt from January Sales 255300 74000 40700
Receipt from February Sales 293595 85100
Receipt from March Sales 337634
Total Cash collection 255300 367595 463434

d) Account receivable = (425500*11%+489325*31%) = $198496

.

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