ted Sites el Web Slice Gellery Previous Attempt View Slver Company makes a produ
ID: 2401583 • Letter: T
Question
ted Sites el Web Slice Gellery Previous Attempt View Slver Company makes a product that its 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 tor the second quarter given June Total Budgeted sales fall on account) $430,000 $630,000 $200 0001 260000 From past experence. the company has learned hat 25% of a monts sales are colected n the math month following sae and he remaining 15% are colected n e Of sale, another 60% are colected in the socond month sale. Bad debts are are negigible and can be ignored Fobruary saies totaled 5360,000, and March sales totaled $390 000 1 Prepare a schedule of expected cash colloctions from sales, by month and in total for the second Schedule of Expected Cash Collections May June Total February salas Mareh salks Apel saks May sales June sales Total cash collactions 2 Assuna that the company wd prepare a budgeted balance sheet as of June 30, Compute the accounts rocarvable as of that dale Total aaccounts recivable at June 30Explanation / Answer
1. Schedule of Expected cash collection
2. Accounts Recievable as of June 30
15% of the Budgeted Sales of the May will be recovered in July and 75%(60+15) of Budgeted Sales of June will be recovered in July and August respectively and hence will form part of Account Receivable.
April May June Total ($) Febuary Sales 54000(360000*0.15) 0 0 54000 March Sales 234000(390000*0.60) 58500(390000*0.15) 0 292500 April Sales 107500(430000*0.25) 258000(430000*0.60) 64500(430000*0.15) 430000 May Sales 0 157500(630000*0.25) 378000(630000*0.60) 535500 June Sales 0 0 50000(200000*0.25) 50000 Total Cash Collection ($) 395500 474000 492500 1362000Related Questions
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