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

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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 ri May June Total Budgeted sales (all on account) $450,000 $650,000 $250,000 $1,350,000 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 $380,000, and March sales totaled $410,000 Required 1. Prepare a schedule of expected cash collections from sales, by month and in total, for the second quarter Silver Company Schedule of Expected Cash Collections April May June Total February sales March sales April sales May sales June sales Total cash collections 0 0 0 0 2. Assume that the company will prepare a budgeted balance sheet as of June 30. Compute the accounts receivable as of that date Silver Company Accounts receivable at June 30 May sales June sales Total accounts receivable at June 30$ 0

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1. Schedule April May June Total February Sales 57000 57000 March Sales 246000 61500 307500 April Sales 112500 270000 67500 450000 May Sales 162500 390000 552500 June Sales 62500 62500 Total Cash Collections 415500 494000 520000 1429500 Working: Feb Mar April May June Total Sales 380000 410000 450000 650000 250000 25% Same Month 95000 102500 112500 162500 62500 60% Next Month 228000 246000 270000 390000 15% Second Month 57000 61500 67500 2. Accounts Receivable May Sales 97500 650000-162500-390000 June Sales 187500 250000-62500 Total Accounts Receivable 285000

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