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 the company's sales budget for the second quarter given below. April May June Total Budgeted sales (all on $470,000 $670,880 $230,000 $1,370,000 account) From past experience, the company has learned that 25% of a month's sales are collected in the month of sale, another 65% are collected in the month following sale, and the remaining 10% are collected in the second month following sale. Bad debts are negligible and can be ignored. February sales totaled $400,000, and March sales totaled $430,000 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? 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 quarter. Schedule of Expected Cash Collections April June Total February sales March sales April sales May sales June sales Total cash collections S 0 S 0 S 0

Answer 1

	Feb	Mar	April	May	June
Budgeted Sales	400000	430000	470000	670000	230000
Schedule of Expected Collections
	April	May	June	Total
Feb Sales	40,000			40,000
Mar Sales	279,500	43,000		322,500
Apr Sales	117,500	305,500	47,000	470,000
May Sales		167,500	435,500	603,000
June Sales			57,500	57,500
Total Cash collections	437,000	516,000	540,000	1,493,000
Accounts receivables balance on June 30
from May Sales	67,000
From June Sales	172,500
Accounts receivables balance on June 30	239,500