Ed's Waterbeds has made the following sales projections for the next six months. All sales are credit sales. March $ 12,000 June $ 14,000 April 16,000 July 17,000 May 10,000 August 18,000 Sales in January and February were $13, 500 and $13,000 respectively. Experience has shown that 10 percent of total sales are uncollectible, 30 percent are collected in the month of sale, 40 percent are collected in the following month, and 20 percent are collected two months after sale. a. Prepare a monthly cash receipts schedule for the firm for March through August. Ed's Waterbeds Cash Receipts Schedule January February March April May June July August Sales $ $ $ $ $ $ $ $ Collections of current sales Collections of prior month's sales Collections of sales 2 months earlier Total cash receipts $ $ $ $ $$b. Of the sales expected to be made during the six months from March to August, how much will still be uncollected at the end of August? How much of this is expected to be collected later? Amount Uncollected $ Expected to be collected $

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Ed's Waterbeds has made the following sales projections for the next six months. All sales are credit sales. March $ 12,000 June $
14,000 April 16,000 July 17,000 May 10,000 August 18,000 Sales in January and February were $13, 500 and $13,000 respectively.
Experience has shown that 10 percent of total sales are uncollectible, 30 percent are collected in the month of sale, 40 percent are
collected in the following month, and 20 percent are collected two months after sale. a. Prepare a monthly cash receipts schedule for
the firm for March through August. Ed's Waterbeds Cash Receipts Schedule January February March April May June July August Sales $
$ $ $ $ $ $ $ Collections of current sales Collections of prior month's sales Collections of sales 2 months earlier Total cash receipts $ $ $ $
$$b. Of the sales expected to be made during the six months from March to August, how much will still be uncollected at the end of
August? How much of this is expected to be collected later? Amount Uncollected $ Expected to be collected $
Transcribed Image Text:Ed's Waterbeds has made the following sales projections for the next six months. All sales are credit sales. March $ 12,000 June $ 14,000 April 16,000 July 17,000 May 10,000 August 18,000 Sales in January and February were $13, 500 and $13,000 respectively. Experience has shown that 10 percent of total sales are uncollectible, 30 percent are collected in the month of sale, 40 percent are collected in the following month, and 20 percent are collected two months after sale. a. Prepare a monthly cash receipts schedule for the firm for March through August. Ed's Waterbeds Cash Receipts Schedule January February March April May June July August Sales $ $ $ $ $ $ $ $ Collections of current sales Collections of prior month's sales Collections of sales 2 months earlier Total cash receipts $ $ $ $ $$b. Of the sales expected to be made during the six months from March to August, how much will still be uncollected at the end of August? How much of this is expected to be collected later? Amount Uncollected $ Expected to be collected $
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