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Problem 7-17A (Algo) Preparing a sales budget and schedule of cash receipts LO 7-2 Thornton Pointers Corporation expects to begin operations on January 1, year 1; it will operate as a specialty sales company that sells laser pointers over the Internet. Thornton expects sales in January year 1 to total $400,000 and to increase 20 percent per month in February and March. All sales are on account. Thornton expects to collect 66 percent of accounts receivable in the month of sale, 24 percent in the month following the sale, and 10 percent in the second month following the sale. Required a. Prepare a sales budget for the first quarter of year 1. b. Determine the amount of sales revenue Thornton will report on the year 1 first quarterly pro forma income statement. c. Prepare a cash receipts schedule for the first quarter of year 1. d. Determine the amount of accounts receivable as of March 31, year 1. Complete this question by entering your answers in the tabs below. Required A Required B Required C Required D Prepare a sales budget for the first quarter of year 1.

Problem 7-17A (Algo) Preparing a sales budget and schedule of cash receipts LO 7-2 Thornton Pointers Corporation expects to begin operations on January 1, year 1; it will operate as a specialty sales company that sells laser pointers over the Internet. Thornton expects sales in January year 1 to total $400,000 and to increase 20 percent per month in February and March. All sales are on account. Thornton expects to collect 66 percent of accounts receivable in the month of sale, 24 percent in the month following the sale, and 10 percent in the second month following the sale. Required a. Prepare a sales budget for the first quarter of year 1. b. Determine the amount of sales revenue Thornton will report on the year 1 first quarterly pro forma income statement. c. Prepare a cash receipts schedule for the first quarter of year 1. d. Determine the amount of accounts receivable as of March 31, year 1. Complete this question by entering your answers in the tabs below. Required A Required B Required C Required D Prepare a sales budget for the first quarter of year 1.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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**Problem 7-17A (Algo) Preparing a sales budget and schedule of cash receipts LO 7-2** Thornton Pointers Corporation expects to begin operations on January 1, year 1. It will operate as a specialty sales company that sells laser pointers over the Internet. Thornton expects sales in January year 1 to total $400,000 and to increase 20 percent per month in February and March. All sales are on account. Thornton expects to collect 66 percent of accounts receivable in the month of sale, 24 percent in the month following the sale, and 10 percent in the second month following the sale. **Required:** a. Prepare a sales budget for the first quarter of year 1. b. Determine the amount of sales revenue Thornton will report on the year 1 first quarterly pro forma income statement. c. Prepare a cash receipts schedule for the first quarter of year 1. d. Determine the amount of accounts receivable as of March 31, year 1. --- **Sales Budget** | Month | Sales Amount | |-------------|--------------------| | January | $400,000 | | February | $480,000 (20% increase)| | March | $576,000 (20% increase) | (Note: Calculations have been inferred based on the problem statement. You may provide the exact values as needed). To complete each requirement, enter your answers in the tabs provided in the problem interface. **Graph/Diagram Explanation:** An interactive table/chart is provided to input calculated budget and cash receipt values for each month (January, February, and March). The first section requests the sales budget values for each month with editable fields to input numbers. Below this section, additional sections (tabs) are designed for subsequent requirements (B, C, D as listed).
Transcribed Image Text:**Problem 7-17A (Algo) Preparing a sales budget and schedule of cash receipts LO 7-2** Thornton Pointers Corporation expects to begin operations on January 1, year 1. It will operate as a specialty sales company that sells laser pointers over the Internet. Thornton expects sales in January year 1 to total $400,000 and to increase 20 percent per month in February and March. All sales are on account. Thornton expects to collect 66 percent of accounts receivable in the month of sale, 24 percent in the month following the sale, and 10 percent in the second month following the sale. **Required:** a. Prepare a sales budget for the first quarter of year 1. b. Determine the amount of sales revenue Thornton will report on the year 1 first quarterly pro forma income statement. c. Prepare a cash receipts schedule for the first quarter of year 1. d. Determine the amount of accounts receivable as of March 31, year 1. --- **Sales Budget** | Month | Sales Amount | |-------------|--------------------| | January | $400,000 | | February | $480,000 (20% increase)| | March | $576,000 (20% increase) | (Note: Calculations have been inferred based on the problem statement. You may provide the exact values as needed). To complete each requirement, enter your answers in the tabs provided in the problem interface. **Graph/Diagram Explanation:** An interactive table/chart is provided to input calculated budget and cash receipt values for each month (January, February, and March). The first section requests the sales budget values for each month with editable fields to input numbers. Below this section, additional sections (tabs) are designed for subsequent requirements (B, C, D as listed).
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