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 budgot for the second quarter given below Budgeted sales (all on account) $420,000 $620,000 $240,000 $1,280,000 From past experience, the company has learned that 20% of a month's sales are collected in the month of sale, another 65% 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 $350,000, and March sales totaled $380,000 Required: 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 Apnil sales May sales June sales Total cash collectionss 0 O Type here to search

Explanation / Answer

EXPECTED CASH COLLECTIONS APRIL MAY JUNE QUARTER Feb month sales 52,500 52,500 March Month Sales 247,000 57000 304,000 April Month Sales 84000 273000 63000 420,000 May Month Sales 124,000 403,000 527,000 June Month sales 48000 48,000 Total Cash Collections 383,500 454,000 514,000 1,351,500 ACCOUNTS RECIEVABLE AT JUNE30 May sales (620,000*15%) 93000 June sales (240,000*80%) 192000 Total Accounts receivable at June30 285000

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