Question

1 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 below: 1.48 points Total April May #510,000 June $160,000 Budgeted sales (all on acoount) $980,000 $310.000 ellook Hint the month of sale, another 60 % are From past experience, the company has leamed that 25% of a month's sales are colected 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 $240,000, and March sales totaled $270,00o Print References 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 recevable balance on June 30th? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare a schedule of expected cash collections from sales, by month and in total, for the second guarter. Schedule of Expected Cash Colections May Total April June Febniary sales 1 of 9 Prev Score answer >

Answer 1

Solution 1:

Schedule of expected cash collection - Silver Company
Particulars	April	May	June	Total
Cash received for February Sale	$36,000.00			$36,000.00
Cash received for March Sale	$162,000.00	$40,500.00		$202,500.00
Cash received for April Sale	$77,500.00	$186,000.00	$46,500.00	$310,000.00
Cash received for May Sale		$127,500.00	$306,000.00	$433,500.00
Cash received for June Sale			$40,000.00	$40,000.00
Budgeted Cash Collection	$275,500.00	$354,000.00	$392,500.00	$1,022,000.00

Solution 2:

Accounts receivable balance on June 30 = ($510,000*15%) + ($160,000*75%)

= $196,500