acc561 dorough pointers inc expects to begin operations on january 1 2009 it will op 502318

Preparing a sales budget and schedule of cash receipts

Dorough Pointers, Inc. expects to begin operations on January 1, 2009; it will operate as a specialty sales company that sells laser pointers over the Internet. Dorough expects sales in January 2009 to total $120,000 and to increase 10 percent per month in February and March. All sales are on account. Dorough expects to collect 70% of accounts receivable in the month of sale, 20% in the month following the sale and 10% in the second month following the sale.

Requirements:

a. Prepare a sales budget for the first quarter of 2009.

b. Determine the amount of sales revenue Dorough will report on the first 2009 quarterly pro forma income statement.

c. Prepare a cash receipts schedule for the first quarter of 2009.

d. Determine the amount of accounts receivable as of March 31, 2009.