Help Sa Silver Company makes a product that is very popular as a Mother\'s Day g

Question

Help Sa 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 $390,000 $590,000 $230,000 $1,210,000 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 $320,000, and March sales totaled $350,000. 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. Prepare a schedule of expected cash collections from sales, by month and in total, for the second quarter of Prev , 1 of 3 Next > 9

Explanation / Answer

Schedule of expected cash collection :

b) Account receivable balance on june 30 = (590000*15%+230000*75%) = $261000

April May June Total February Sales 48000 48000 March sales 210000 52500 262500 April Sales 97500 234000 58500 390000 May sales 147500 354000 501500 June sales 57500 57500 Total 355500 434000 470000 1259500

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