12. 120 points Midwest Products is a wholesale distributor of leaf rakes. Thus,

Question

12. 120 points Midwest Products is a wholesale distributor of leaf rakes. Thus, peak sales occur in August of each year as shown in the company's sales budget for the third quarter, given below Budgeted sales (all on account) $598,000 836,000 $480,000 $1,914.000 From past experience, the company has learned that 20% of a month's sales are collected in the month of sale another 70% are collected in the month following sale, and the remaining 10% are collected in the second month following sale. Bad debts are negligible and can be ignored. May sales totaled $416.000. and June sales totaled $531,000. Required 1. Prepare a schedule of expected cash collections from sales, by month and in total, for the third quarter (Do not round intermediate calculations.) Schedule of Expected Cash Collections July August September Total May sales June sales July sales August sales September sales Total cash collections 2. Assume that the company will prepare a budgeted balance sheet as of September 30. Compute the sccounts receivable as of that date. (Do not round intermediate calculations.) August sales September sales Total sccounts receivable

Explanation / Answer

1) Budgeted cash collection :

2) September 30 account receivable :

July August september Total May sales 41600 41600 June sales 371700 53100 424800 July Sales 119600 418600 59800 598000 August sales 167200 585200 752400 September sales 96000 96000 Total cash collection 532900 638900 741000 1912800

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