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: April May June Total Budgeted sales (all on account) $320,000 $520,000 $180,000 $1,020,000 From past experience, the company of sale, another 65% are collected in the month following sale, and the remaining 5% are colected in the second month following sale. Bad debls are neg igible and can be ignored. February sales totaled $250,000, and March sales totaled $280,000. has learned that 30% of a month's sales are collected in the month 1. Prepare a schedule of expected cash collections from sales, by month and in total, for the second quarter Silver Company Schedule of Expected Cash Collections April May June Total February sales March sales April sales May sales June sales Total cash collections 2. Assume that the company will prepare a budgeted balance sheet as of June 30. Compute the accounts receivable as of that date. Silver Company Accounts receivable at June 30 May sales June sales Total accounts receivable at June 30

Explanation / Answer

1.

Silver Company

Schedule of Expected Cash Collections

2.

Silver Company

Accounts receivable at June 30

2.

Down Under Products, Ltd.,

Production Budget

Mink Caress

Direct Materials Budget - Year 2

April May June Total February sales 12,500 (250,000*5%) 12,500 March sales 182,000 (280,000*65%) 14,000 (280,000*5%) 196,000 April sales 96,000 (320,000*30%) 208,000 (320,000*65%) 16,000 (320,000*5%) 320,000 May sales 156,000 (520,000*30%) 338,000 (520,000*65%) 494,000 June sales 54,000 (180,000*30%) 54,000 Total cash collections 290,500 378,000 408,000 1,076,500

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