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    Monthly Schedule of Cash Receipts: Diamond Beauty Supply

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    Diamond Beauty supply Shop projects the following sales:

    April - $75,000
    May - $95,000
    June - $100,000

    Seventy percent of Diamond Beauty Supply shop sales are on credit with 60 percent of receivables collected in the month after the sale and the rest of receivables collected in the second month after the sale. February sales were $60,000 and March sales were $70,000. In the past Diamond Beauty Supply shops' bad debt percentage has been 0 and is expected to continue.

    a) Prepare a monthly schedule of cash receipts for April-June.
    b) What is the balance of Receivables at the end of June?

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    Solution Preview

    Please see the attached Excel 97-2003 spreadsheet for full solutions.

    a) Prepare a monthly schedule of cash receipts for April-June.

    April May June Quarter
    February sales ...

    Solution Summary

    This solution illustrates how to prepare a schedule of cash receipts and how to compute a company's accounts receivable balance using that schedule.