Question
You are the marketing manager of Tizer Pharma Co. that began operations in Jan 2023. The business was a cash business (ie., did not accept
You are the marketing manager of Tizer Pharma Co. that began operations in Jan 2023. The business was a cash business (ie., did not accept credit) until May 2023, when they were able to build a credit approval process. Therefore, A/R balance as of May 1 2023 was $0. Actual revenues and collections are noted in the chart below. Expected sales revenues for the remaining six months of 2023 are as follows: $ thousands May (actuals) 600 June (actuals) 600 July (forecast) 700 Aug (forecast) 700 Sept (forecast) 800 Oct (forecast) 800 Nov (forecast) 900 Dec (forecast) 900 From July 1 onwards, you expect the collection pattern to be as follows: 20% of sales are cash sales and are received in the month of sale. 50% of sales are on one months credit and paid in the month following sale. 30% of sales are paid in the second month following sale. Required Prepare a schedule of cash received and A/R balance from sales for July to December of the year.
| You are the marketing manager of Tizer Pharma Co. that began operations in Jan 2023. The business was a cash business (ie., did not accept credit) until May 2023, when they were able to build a credit approval process. Therefore, A/R balance as of May 1 2023 was $0. Actual revenues and collections are noted in the chart below. Expected sales revenues for the remaining six months of 2023 are as follows: | |||||||||||
| $ thousands | |||||||||||
| May (actuals) | 600 | ||||||||||
| June (actuals) | 600 | ||||||||||
| July (forecast) | 700 | ||||||||||
| Aug (forecast) | 700 | ||||||||||
| Sept (forecast) | 800 | ||||||||||
| Oct (forecast) | 800 | ||||||||||
| Nov (forecast) | 900 | ||||||||||
| Dec (forecast) | 900 | ||||||||||
| From July 1 onwards, you expect the collection pattern to be as follows: | |||||||||||
| 20% of sales are cash sales and are received in the month of sale. | |||||||||||
| 50% of sales are on one months credit and paid in the month following sale. | |||||||||||
| 30% of sales are paid in the second month following sale. | |||||||||||
| Required | |||||||||||
| Prepare a schedule of cash received and A/R balance from sales for July to December of the year. | |||||||||||
| May (act) | Jun (act) | Jul | Aug | Sep | Oct | Nov | Dec | |
|---|---|---|---|---|---|---|---|---|
| Sales (as given) | 600000 | 600000 | ||||||
| Cash sales | 110000 | 120000 | ||||||
| 1 month after sale | 310000 | 300000 | ||||||
| 2 months after sale | 180000 | |||||||
| Total Cash Collected | 110000 | 430000 | ||||||
| A/R - beginning bal | 0 | 490000 | ||||||
| + Additions | 600000 | 600000 | ||||||
| - Collections | -110000 | -430000 | ||||||
| A/R - ending bal | 490000 | 660000 |
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Accounting Principles
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
9th Edition
978-0470533475
