Najimi Enterprises recently began selling on the internet.Internet sales for the fourth quarter of Year 1 totaled $600,000.The company's internet sales are expected to grow at a rate of 20% per quarter.All sales are made on account.The company's collection experience is that 70% of accounts receivable will be collected in the quarter of sale and 25% in the next quarter.Five percent of receivables will prove uncollectible and are written off during the quarter following the quarter of sale.The balance in accounts receivable at the end of December Year 1 was $150,000.
Required:
a)Prepare a sales budget for internet sales for the four quarters of Year 2; include a total column that shows total budgeted internet sales for the year.
b)Compute the accounts receivable balance as of the end of Year 2.
c)Prepare a cash receipts schedule for all four quarters of Year 2 and the year as a whole.

Question

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The Answer of Najimi Enterprises recently began selling on the internet.Internet sales for the fourth quarter of Year 1 totaled $600,000.The company's internet sales are expected to grow at a rate of 20% per quarter.All sales are made on account.The company's collection experience is that 70% of accounts receivable will be collected in the quarter of sale and 25% in the next quarter.Five percent of receivables will prove uncollectible and are written off during the quarter following the quarter of sale.The balance in accounts receivable at the end of December Year 1 was $150,000.
Required:
a)Prepare a sales budget for internet sales for the four quarters of Year 2; include a total column that shows total budgeted internet sales for the year.
b)Compute the accounts receivable balance as of the end of Year 2.
c)Prepare a cash receipts schedule for all four quarters of Year 2 and the year as a whole.

Najimi Enterprises Recently Began Selling on the Internet