Najimi Enterprises Recently Began Selling on the Internet

question 85

Essay

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.

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Definitions:

Tender Can Be Made

Indicates that an offer or presentation of payment or performance in accordance with the terms of a contract is possible or has occurred.

Day Or Night

A term used to indicate that an action or operation can occur at any time within a 24-hour period.

Revocation Of Acceptance

Undoing the acceptance of an offer or contract, often due to the discovery of a significant problem or defect.

Waived His Right

The act of voluntarily relinquishing a known right, claim, or privilege.