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 $420,000 $620,000 $240,000 $1,280,000 May June Total Budgeted sales (all on account) 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. 2. What is the accounts receivable balance on June 30th? es Complete this question by entering your answers in the tabs below.

Explanation / Answer

Schedule of expected cash collection :

Account receivable = (620000*15%+240000*80%) = 285000

april may june Total February sales 350000*15%=52500 52500 march sales 380000*65%=247000 380000*15%=57000 304000 april sales 420000*20%=84000 420000*65%=273000 420000*15%=63000 420000 may sales 620000*20%=124000 620000*65%=403000 527000 June sales 240000*20%=48000 48000 Total cash collection 383500 454000 514000 1351500

Related Questions

Navigate

• Browse (All)
• Browse S
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.