From past experience, the company has learned that 30% of a month%u2019s sales a

Question

From past experience, the company has learned that 30% of a month%u2019s sales are collected in the month of sale, another 65% are collected in the month following sale, and the remaining 5% are collected in the second month following sale. Bad debts are negligible and can be ignored. May sales totaled $435,000, and June sales totaled $516,000.

Prepare a schedule of expected cash collections from sales, by month and in total, for the third quarter. (Do not round intermediate calculations. Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.)

$

$

$

$

Assume that the company will prepare a budgeted balance sheet as of September 30. Compute the accounts receivable as of that date. (Do not round intermediate calculations. Omit the "$" sign in your response.)

Midwest Products is a wholesale distributor of leaf rakes. Thus, peak sales occur in August of each year as shown in the company%u2019s sales budget for the third quarter, given below:

Explanation / Answer

July Collection:
July%u2026596k * 30% = 178,800
June%u2026516k * 65% = 335,400
May%u2026435k * 5% = 21,750
July total%u2026%u2026%u2026%u2026...535,950

August Collection:
Aug%u2026852k * 30% = 255,600
July%u2026596k * 65% = 387,400
June%u2026516k * 5% = 25,800
August total%u2026.%u2026%u2026..668,800

September Collection:
Sept%u2026485k * 30% =145,500
Aug%u2026852k * 65% = 553,800
July%u2026596k * 5% = 29,800
September total%u2026..729,100

3rd qtr total collection = $1,933,850

Sept 30%...............485k %u2013 145.5k = 339,500
Aug. 30%, 65%%u2026...852k %u2013 (255.6k + 553.8k) = 42,600
A/R as of September 30 = $382,100

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