Exercise 8-1 Schedule of Expected Cash Collections [LO8-2] Silver Company makes
ID: 2552931 • Letter: E
Question
Exercise 8-1 Schedule of Expected Cash Collections [LO8-2] Silver Company makes a product that is very popular as a Mother's Day gift. Thus, peak sales occur in May of each year, as shown in the company's sales budget for the second quarter given below April $490,600 $690,000 $220,000 $1,400,0e0 May June Total Budgeted sales (all on account) From past experience, the company has learned that 25% of a month's sales are collected in the month of sale, another 60% are collected in the month following sale, and the remaining 15% are collected in the second month following sale Bad debts are negligible and can be ignored. February sales totaled $420,000, and March sales totaled $450,000 Required: 1. Prepare a schedule of expected cash collections from sales, by month and in total, for the second quarter. 2. What is the accounts receivable balance on June 30th? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare a schedule of expected cash collections from sales, by month and in total, for the second quarter. 1of 4 Next >Explanation / Answer
1.
Schedule of Expected cash collections rom Sales
April May June
25% of Sales in Current month $122,500 $172,500 $55,000
60% of sale in Followig month $270,000 $294,000 $414,000
15% in Second month following of Sales $63,000 $67,500 $73,500
__________________________________
Total Collections $455,500 $534,000 $542,500
Total Collections for the quarter $1,532,000
2. Accounts receivable balance on June 30th
75% of Sales from June sales $ 165,000
15% of Sales from May sales $ 103,500
_________
Total Accounts receivable on 30th June $268,500
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