3. 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: **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:** $290,000- **June:** $440,000- **July:** $590,000All sales are on account. It is expected that 51% of sales will be collected in the month of the sale, 39% 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.---### Furry Friends Supplies Inc.**Schedule of Collections from Sales for the Three Months Ending May 31**| | May | June | July ||------------------------------|-----------|-----------|-------------|| **May sales on account:** | | | || Collected in May | | | || Collected in June | [ ] | | || Collected in July | | [ ] | || **June sales on account:** | | | || Collected in June | | [ ] | || Collected in July | | | [ ] || **July sales on account:** | | | || Collected in July | | | [ ] || **Total cash collected** | $[ ] | $[ ] | $[ ] |**Note:**Fill in the blanks with the calculated values based on the projected sales percentages for collection.

Answered: Schedule of Cash Collections of…

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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3. 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:

**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:** $290,000
- **June:** $440,000
- **July:** $590,000

All sales are on account. It is expected that 51% of sales will be collected in the month of the sale, 39% 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.

---

### Furry Friends Supplies Inc.
**Schedule of Collections from Sales for the Three Months Ending May 31**

| | May | June | July |
|------------------------------|-----------|-----------|-------------|
| **May sales on account:** | | | |
| Collected in May | | | |
| Collected in June | [ ] | | |
| Collected in July | | [ ] | |
| **June sales on account:** | | | |
| Collected in June | | [ ] | |
| Collected in July | | | [ ] |
| **July sales on account:** | | | |
| Collected in July | | | [ ] |
| **Total cash collected** | $[ ] | $[ ] | $[ ] |

**Note:**
Fill in the blanks with the calculated values based on the projected sales percentages for collection.

Expert Solution

Step 1: Cash Budget

Cash budget is the type of budget that helps in forecasting of cash inflows and outflows.

It is a financial planning tool used by individuals, businesses, and organizations to estimate their future cash inflows and outflows over a specific period, typically on a monthly or quarterly basis. It helps in managing and monitoring cash flow to ensure that there is enough cash available to cover expenses, debts, and other financial obligations.

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