Answer:
Explanation:
The preparation of sales budget for the first quarter of year
Sales budget for the first quarter
Jan Feb March
Sales $260,000 $312,000 $374,400
Working Note
For Feb Sales = $260,000 × (100 + 20%)
= $260,000 × 120%
= $312,000
For March Sales = $312,000 × 120%
= $374,400
The amount of sales revenue Stuart will report on the year 1 first quarterly pro forma income statement is shown below:-
Jan Sales = $260,000
Feb Sales = $260,000 × (100 + 20%)
= $260,000 × 120%
= $312,000
March Sales = $312,000 × 120%
= $374,400
Total Sales = $260,000 + $312,000 + $374,400
= $946,400
The preparation of cash receipts schedule for the first quarter of year is shown below:-
Jan Feb March
Jan Sales collection $182,000 $54,600 $23,400
($260,000 × 70%) ($260,000 × 21%) ($260,000 × 9%)
Feb Sales collection $218,400 $65,520
($312,000 × 70%) ($312,000 × 21%)
March Sales collection $262,080
($374,400 × 70%)
Total cash collections $182,000 $273,000 $351,000
The amount of accounts receivable is given below:-
Receivables
Out of Feb Sales $28,080
($312,000 × 9%)
Out of March Sales $112,320
($374,400 × (21% + 9%))
Total receivables $140,400
