Problem 2

Cash Collections from Customers

All of Black Horse Corp. sales are done on a credit basis with its customers. The customers typically pay the company 75% in the quarter of the sale and the remaining 25% in the following quarter. Black Horse Corp. is on a calendar year basis and at the end of 2021, the budgeted balance sheet shows $1,000,000 for outstanding accounts receivable, all of which are expected to be collected in the first quarter of 2022. Sales for the first 2 quarters of 2022 are budgeted to be: $6,000,000 in quarter 1 and $6,200,000 in quarter 2.

Prepare the cash collection schedule for the first 2 quarters of 2022 for Black Horse Corp.

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