Solomon 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. Solomon expects sales in January Year 1 to total $240,000 and to increase 15 percent per month in February and March. All sales are on account. Solomon expects to collect 66 percent of accounts receivable in the month of sale, 23 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 Year 1. b. Determine the amount of sales revenue Solomon 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.
Solomon 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. Solomon expects sales in January Year 1 to total $240,000 and to increase 15 percent per month in February and March. All sales are on account. Solomon expects to collect 66 percent of accounts receivable in the month of sale, 23 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 Year 1. b. Determine the amount of sales revenue Solomon 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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Nn.113.
Subject :- Accounting
Transcribed Image Text:Solomon 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. Solomon expects sales in January Year 1 to total $240,000 and to increase 15 percent per month in
February and March. All sales are on account. Solomon expects to collect 66 percent of accounts receivable in the month of sale, 23
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 Year 1.
b. Determine the amount of sales revenue Solomon 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.
January
February
$ 240,000 $ 276,000 $
Sales on account
March
317,400 S
Total
833,400
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