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) | $450,000 | $650,000 | $250,000 | $1,350,000 |
From past experience, the company has learned that 25% of a month’s sales are collected in the month of sale, another 60% 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 $380,000, and March sales totaled $410,000.
Required:
1. Prepare a schedule of expected cash collections from sales, by month and in total, for the second quarter.
SCHEDULE | OF | EXPECTED | CASH | COLLECTIONS |
---|---|---|---|---|
APRIL | MAY | JUNE | TOTAL | |
FEB. SALES | ||||
MARCH SALES | ||||
APRIL SALES | ||||
MAY SALES | ||||
JUNE SALES | ||||
TOTAL CASH COLLECTIONS |
2. What is the accounts receivable balance on June 30th?
Answer
Schedule of Expected Cash Collections |
||||
April |
May |
June |
Total |
|
February sales |
$57,000 |
$57,000 |
||
March sales |
$246,000 |
$61,500 |
$307,500 |
|
April sales |
$112,500 |
$270,000 |
$67,500 |
$450,000 |
May sales |
$162,500 |
$390,000 |
$552,500 |
|
June sales |
$62,500 |
$62,500 |
||
Total cash collections |
$415,500 |
$494,000 |
$520,000 |
$1,429,500 |
--Working
April |
May |
June |
|
February sales |
=380000*15% |
||
March sales |
=410000*60% |
=410000*15% |
|
April sales |
=450000*25% |
=450000*60% |
=450000*15% |
May sales |
=650000*25% |
=650000*60% |
|
June sales |
=250000*25% |
Account receivables on June 30: |
|
From May Sale (650000 x 15%) |
$97,500 |
From June sale (250000 x 75%) |
$187,500 |
Total = ANSWER |
$285,000 |
Silver Company makes a product that is very popular as a Mother’s Day gift. Thus, peak...
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) $450,000 $650,000 $250,000 $1,350,000 From past experience, the company has learned that 25% of a month’s sales are collected in the month of sale, another 60% are collected in the month following sale, and the...
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) $300,000 $500,000 $200,000 $1,000,000 From past experience, the company has learned that 20% of a month’s sales are collected in the month of sale, another 70% are collected in the month following sale, and the...
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) $480,000 $680,000 $260,000 $1,420,000 From past experience, the company has learned that 30% of a month’s sales are collected in the month of sale, another 60% are collected in the month following sale, and the...
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) $420,000 $620,000 $240,000 $1,280,000 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...
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) $500,000 $700,000 $240,000 $1,440,000 From past experience, the company has learned that 20% of a month’s sales are collected in the month of sale, another 60% are collected in the month following sale, and the...
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 following sale, and the...
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) $340,000 $540,000 $170,000 $1,050,000 From past experience, the company has learned that 20% of a month’s sales are collected in the month of sale, another 75% are collected in the month following sale, and the...
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) $310,000 $510,000 $160,000 $980,000 From past experience, the company has learned that 25% of a month’s sales are collected in the month of sale, another 60% are collected in the month following sale, and the...
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) $360,000 $560,000 $220,000 $1,140,000 From past experience, the company has learned that 30% of a month’s sales are collected in the month of sale, another 60% are collected in the month following sale, and the...
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: Budgeted sales (all on account) April $450,000 May $650,000 June $250,000 Total $1,350,000 From past experience, the company has learned that 25% of a month's sales are collected in the month of sale, another 60% are collected in the month following sale, and the...