Armand Company projects the following sales for the first threemonths of the year: $10,600 in January; $12,300 in February; and$12,900 in March The company expects 60% of the sales to be cashand the remainder on account. Sales on account are collected 50% inthe month of the sale and 50% in the following month. The AccountsReceivable account has a zero balance on January 1. Round to thenearest dollar. 1. Prepare a schedule of cash receipts for Armandfor January, February, and March. What is the balance in AccountsReceivable on March 31? 2. Prepare a revised schedule of cashreceipts if receipts from sales on account are 60% in the month ofthe sale, 30% in the month following the sale, and 10% in thesecond month following the sale. What is the balance in AccountsReceivable on March 31? Solution: Requirement 1 Schedule of CashReceipts from Customers January February March Total Total Sales$10,600 $12,300 $12,900 $35,800 Cash Receipts from CustomersAccounts Receivable Balance, January 1 $0 1st Qtr. - Cash sales(60%) 6,360 1st Qtr. - Collected for sales on credit (20%) 2,1202nd Qtr. - Collection of remaining amount of Jan. sales (20%)$2,120 2nd Qtr. - Cash sales (60%) 7,380 2nd Qtr. - Collected forsales on credit (20%) 2,460 3rd Qtr. - Collection of remainingamount of Feb. sales (20%) $2,460 3rd Qtr. - Cash sales (60%) 7,7403rd Qtr. - Collected for sales on credit (20%) 2,580 Total cashreceipts from customers $8,480 $11,960 $12,780 $33,220 Calculateand show below the Accounts Receivable Balance as of March 31Requirement 2 Revised Schedule of Cash Receipts from CustomersJanuary February March Total Accounts Receivable balance, March 31:Amount February - Credit sales (finish this . . . .
