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 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 $270,000. 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?
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Solution:-
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 | |
February Sales | 36,000 | 36,000 | ||
March Sales | 162,000 | 40,500 | 202,500 | |
April Sales | 77,500 | 186,000 | 46,500 | 310,000 |
May Sales | 127,500 | 306,000 | 433,500 | |
June Sales | 40,000 | 40,000 | ||
Total Cash Collections | 239,500 | 354,000 | 428,500 | 1,022,000 |
2. What is the accounts receivable balance on June 30th:-
$196,500.
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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) $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) $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: 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) $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) $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) $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...