Silver Company makes a product that is very popular as a Mother\'s Day gift. Thu

Question

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: Budgeted sales (all on account) April May June Total $490,000 $690,000 $220,000 $1,400,000 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. Schedule of Expected Cash Collections April May June Total February sales March sales April sales May sales

Explanation / Answer

Schedule of expected Cash collections April May June Total February sales $63,000 $63,000 March Sales $270,000 $67,500 $337,500 April Sales $122,500 $294,000 $73,500 $490,000 May Sales $172,500 $414,000 $586,500 June Sales $55,000 $55,000 Expected Cash Collection $455,500 $534,000 $542,500 $1,532,000 Total accounts receivables at June-30 May Sales ($690000*15%) $103,500 June Sales ($220000*75%) $165,000 Total accounts receivables at June-30 $268,500

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