[The following Information applies to me questions displayed below.] Midwest Pro

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[The following Information applies to me questions displayed below.] Midwest Products is a wholesale distributor of leaf rakes. Thus, peak sales occur n August of each year as shown in the company's sales budget for the third quarter, given below: From past experience, the company has learned that 30% of a month's 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 $411,000, and June sales totaled $536,000. Required: 1. Prepare a schedule of expected cash collections from sales, by month and in total, for the third quarter. (Do not round intermediate calculations. Leave no cells blank - be certain to enter '0'' wherever required. Omit the ''$'' sign in your response.) 2. 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.) Total accounts receivable $

Explanation / Answer

Schedule of Cash Collections Cash Collections Sales Amount July August September Total May Sales 411,000 $ 20,550 20,550 June Sales 536,000 $ 348,400 26,800 375,200 July Sales 553,000 $ 165,900 359,450 27,650 553,000 August Sales 784,000 $ 235,200 509,600 744,800 September Sales 467,000 $ 140,100 140,100 TOTAL 534,850 621,450 677,350 1,833,650 Schedule of AR Accounts Receivable as on 30th September 2015 August Sales (5%) 39,200 September Sales(70%) 326,900 Total 366,100

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