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

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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

Answer:
To complete this exercise, we will need to follow a few steps:

  1. Prepare a schedule of cash receipts that includes the collections from sales and accounts receivable.
  2. Calculate the accounts receivable for inclusion in the third-quarter pro forma balance sheet.

Solution By Steps:

1. Sales Budget Information:
Let’s assume the sales for the upcoming months are as follows (Note: Replace these figures with the actual values from the exercise):

  • July: $300,000
  • August: $340,000
  • September: $310,000

2. Schedule of Cash Receipts:
We need to prepare a schedule that shows the collections from sales in the following month. Since Heather’s Florist collects 100% of sales in the month following the sale, the receipts will be as follows:

  • July Collections:
    • From Accounts Receivable (July 1): $210,000 (Since these are fully collected in July)
  • August Collections:
    • From July Sales: $300,000
  • September Collections:
    • From August Sales: $340,000

Schedule of Cash Receipts:

Month Source of Cash Receipts Amount
July Accounts Receivable on July 1 $210,000
August Sales from July (100% collected in the next month) $300,000
September Sales from August (100% collected in the next month) $340,000

3. Determine Accounts Receivable:
To determine the Accounts Receivable at the end of the third quarter, we need to consider the sales in September which will be collected in October.

  • Accounts Receivable at the end of September:
    • From September Sales: $310,000

The sales from September will be collected in October, therefore the Accounts Receivable reported on the third-quarter pro forma balance sheet will be $310,000.

Final Solution:

a. Schedule of Cash Receipts:

Month Source of Cash Receipts Amount
July Accounts Receivable on July 1 $210,000
August Sales from July (100% collected in the next month) $300,000
September Sales from August (100% collected in the next month) $340,000

b. Accounts Receivable for Third-Quarter Pro Forma Balance Sheet:

The amount of Accounts Receivable to report on the third-quarter pro forma balance sheet is $310,000.

These calculations provide a comprehensive view of cash receipts and accounts receivable for Heather’s Florist, aligning with the standard principles of accounts receivable management and budgeting practices.