Preparing a sales budget and schedule of cash receipts Cobb Corporation sells mail-order computers. In December 2011,

Question:

Preparing a sales budget and schedule of cash receipts Cobb Corporation sells mail-order computers. In December 2011, it has generated $450,000 of sales revenue; the company expects a 20 percent increase in sales in January and 10 percent in February. All sales are on account. Cobb normally collects 80 percent of accounts receivable in the month of sale and 20 percent in the next month.

Required

a. Prepare a sales budget for January and February 2012.

b. Determine the amount of sales revenue Cobb would report on the bimonthly pro forma income statement for January and February 2012.

c. Prepare a cash receipts schedule for January and February 2012.

d. Determine the amount of accounts receivable as of February 28, 2012.

Accounts Receivable
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