Exercise 14-3 preparing a schedule of cash receipts lo 14-2 the budget director of heather's florist has prepared the following sales budget

General
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exercise 14-3 preparing a schedule of cash receipts lo 14-2 the budget director of heather’s florist has prepared the following sales budget. the company had $210,000 in accounts receiv on july 1. heather’s florist normally collects 100 percent of accounts receivable in the month following the month of sale required a. complete the schedule of cash receipts by filling in the missing amounts. b. determine the amount of accounts receivable the company will report on its third quarter pro forma balance sheet complete this question by entering your answers in the tabs below. required a required a balance sheet. determine the amount of accounts receivable the company will report on its third

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Exercise 14-3: Preparing a Schedule of Cash Receipts (LO 14-2)

Sales Budget Information

The company’s budget director has included the following sales budget:

Sales Budget

Month Sales Amount ($)
July x
August y
September z

Accounts Receivable Information

  • Accounts Receivable on July 1: $210,000
  • 100% of accounts receivable are collected in the month following the month of sale.

Required Information

a. Schedule of Cash Receipts

You need to fill in the missing amounts to complete the schedule of cash receipts.

b. Accounts Receivable on Third Quarter Pro Forma Balance Sheet

Determine the ending accounts receivable for the third quarter.

Responses

a. Complete the Schedule of Cash Receipts

To complete the schedule of cash receipts:

  1. Identify the collections for each month, considering that accounts receivable are collected 100% in the month following the month of sale.

If the sales budget (in hypothetical amounts for illustration) is:

  • July: $300,000
  • August: $250,000
  • September: $280,000

The schedule of cash receipts would be:

Month Cash Receipts ($)
July $210,000
August $300,000
September $250,000
Total $760,000

Explanation:

  • July Receipts: The accounts receivable as of July 1.
  • August Receipts: The sales made in July, collected in August.
  • September Receipts: The sales made in August, collected in September.

b. Accounts Receivable on the Third Quarter Pro Forma Balance Sheet

To determine the accounts receivable at the end of the third quarter (September 30):

  • Consider the total sales made in September, which will be collected in the following month (October).

Using the hypothetical sales budget:

  • September sales: $280,000

Accounts Receivable as of September 30: $280,000

This amount represents the sales made in September that will be collected in October, thus reported as accounts receivable on the balance sheet.

Summary of Results

  1. Schedule of Cash Receipts:

    • July: $210,000
    • August: $300,000
    • September: $250,000
    • Total Cash Receipts: $760,000

  2. Accounts Receivable on Third Quarter Pro Forma Balance Sheet:

    • September 30 Accounts Receivable: $280,000

These calculations provide a complete understanding of cash receipts and the accounts receivable for Heather’s Florist as required by Exercise 14-3. If you need specific sales figures relevant to your exercise, replace the hypothetical values with actual data and follow the same steps.