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 has learned that 30% of a month's sales are collected in the month of sale, another 65% are collected in the month f second month following sale. Bad debts are negligible and can be ignored. February sales totaled $250,000, and March sales totaled $280,000 ollow ng sale, and the remaning 5% are colected i the Required 1. Prepare quarter 1Peparea schedule of expected cash colecions from sales, by month and in total, for the second 2. Assume that the company will prepare a budgeted balance sheet as of June 30. Compute the accounts receivable as of that date. HintsReferences eBook & Resources Hint #1 ting for ezto.mheducation.com...

Explanation / Answer

1) Cash collection schedule

b) Account recievable = (520000*5%+180000*70%) = 152000

April May June Quarter February sales 12500 12500 March sales 182000 14000 196000 April sales 96000 208000 16000 320000 May sales 156000 338000 494000 June sales 54000 54000 Total 290500 378000 408000 1076500

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