10.00 points Exercise 8-1 Schedule of Expected Cash Collections [LO8-2 Silver Co

Question

10.00 points Exercise 8-1 Schedule of Expected Cash Collections [LO8-2 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 Budgeted sales (all on account) $430,000 63000 $200,000$1,260,000 From past experience, the company has learned that 25% of a ments sales are colected in the moth, Of sale, another 60% are colected in the moth folowing sale, and the second month following sale. Bad debts are negligible and can be $360,000, and March sales totaled $390,000 15% are collected in the February sales totaled Required: 1. Prepare a schedule of expected cash collections from sales, by month and in total, for the second quarter of Expected Cash Co February sales March sales April sales May sales June sales Total cash collections 01$ 2 Assume that the company will prepare a budgeted balance sheet as of June 30. Compute the accounts receivable as of that date May sales June sales Total accounts receivable at June 30 References eBook & Resources Worksheet Difficuty 1 Easy Exercise s-1 Schedule of Expected Cash

Explanation / Answer

Part 1)

The schedule of expected cash collections from sales is provided as below:

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Part 2)

The accounts receivable balance is determined as below:

Schedule of Expected Cash Collections April May June Total February Sales 54,000 (360,000*15%) 0 0 54,000 March Sales 234,000 (390,000*60%) 58,500 (390,000*15%) 0 292,500 April Sales 107,500 (430,000*25%) 258,000 (430,000*60%) 64,500 (430,000*15%) 430,000 May Sales 0 157,500 (630,000*25%) 378,000 (630,000*60%) 535,500 June Sales 0 0 50,000 (200,000*25%) 50,000 Total Cash Collections $395,500 $474,000 $492,500 $1,362,000

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