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

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 Dudgeted sales (all on account $300.000 $500,000 $200 000 $1000 000 has learned that 20% of a months sales are colected in the month of sale From past experence, the company sale Bad detts are negigitie and can be ignored February sales totaled $230.000, and March saies totaled $260,000 another ros se cotest n ne rom onenguese e ennis Required: 1. Prepare a schedule of expected cash collections from sales, by month and in total for the second quarter February sales Uarch sales Apri sales May sales 2 Assume that the company wi prepare a budgesed balance sneet as of une 30 Compute the accounts recevable as of thar date atal accounts

Explanation / Answer

Required Budgets are as prepared below:

Silver Company Sales Budget For the quarter ended June 30 Month Particulars April May June Total Budgeted Sales (All on account) $300,000 $500,000 $200,000 1,000,000 Silver Company Schedule of expected Cash collections For the quarter ended June 30 Month Particulars April May June Total February sales 23,000 23,000 March sales 182,000 26000 208,000 April Sales 60,000 210,000 30,000 300,000 May Sales 100,000 350,000 450,000 June sales 40,000 40,000 Total Cash collections 265,000 336,000 420,000 1,021,000 Account receivable for June Sale 160,000 Account receivable for May Sale 50,000

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