Adams Pointers Corporation expects to begin operations on January 1, 2019; it will operate as a specialty sales company that sells laser pointers over the Internet. Adams expects sales in January 2019 to total $340,000 and to increase 15 percent per month in February and March. All sales are on account. Adams expects to collect 66 percent of accounts receivable in the month of sale, 22 percent in the month following the sale, and 12 percent in the second month following the sale.
Required:
A. Prepare a sales budget for the first quarter of 2019.
B. Determine the amount of sales revenue Adams will report on the first 2019 quarterly pro forma income statement.
C. Prepare a cash receipts schedule for the first quarter of 2019.
D. Determine the amount of accounts receivable as of March 31, 2019.

a) The Sales Budget for the 2019 first quarter will be:

January - $340,000

February - $391,000 (340,000 x 1.15)

March - $449,650 (391,000 x 1.15)

b) The amount of sales revenue to be reported for the first 2019 quarter is $1,180,650, i.e. the total of sales from January to March.  This equals $1,180,650 (340,000 + 391,000 + 449,650).

c) The cash receipts schedule for the first quarter of 2019 will look like this:

January - 66% of $340,000 = $224,400.

February - 66% of $391,000 + 22% of $340,000 = $332,860.

March - 66% of $449,650 + 22% of $391,000 + 12% of $340,000 = $373,589.

Total cash receipts for the first quarter is $930,849 (224,400 + 332,860 + 373,589)

d) The amount of accounts receivable as of March 31, 2019 is $249,801 (the difference between total quarter sales of $1,180,650 and total quarter cash receipts of $930,849)

Explanation:

A Sales Budget is prepared to determine the sales outlook given certain units of sales at given price units based on prevailing business environment.  It is an educated guess, like all estimates, to value the outcome of a company's sales efforts in the future.

The sales budget determines the revenue to be anticipated and reported.  It is also the basis for cash receipts and the balance of the accounts receivable.

hi,

henry is an economist and wants to understand the relationship between inflation and consumer spending habits. for his research, he needs the consumer price index for 2014 and the inflation rate. based on the prices of goods given, what will he find to be the cpi and inflation rate for 2014? assume that a consumer’s basket for three consecutive years consists of the following:

you dont privide answer choices.

answer - 15% of a inflatation rate is 15% less in cpi