Question

Hi, please help with the questions below! Please provide the detailed solution of how you get these answers, and make sure you answer the question follow the CHART! Thanks.

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: Total Budgeted sales (all on account) $430,e80 630,000$200,0 $1,260,880 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 $360,000, and March sales totaled $390,000. 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 May June Total February sales March sales April sales May sales June sales Total cash c 0S < Required! Required 2

Answer 1

1) Schedule of Expected Cash Collections (Amounts in $)

	April	May	June	Total
February Sales (15% of 360,000 in the month of April)	54,000	0	0	54,000
March Sales (60% in April and 15% in May)	234,000	58,500	0	292,500
April Sales (25% in April, 60% in May and 15% in June)	107,500	258,000	64,500	430,000
May Sales (25% in May, 60% in June and 15% in July)	0	157,500	378,000	535,500
June Sales (25% in June, 60% in July and 15% in August)	0	0	50,000	50,000
Total cash collections	395,500	474,000	492,500	1,362,000

2) The accounts receivable at June 30 will include 15% of the sale in the month of June and 75% (60%+15%) of the sale in the month of July.

Accounts Receivable at June 30 = (15%*630,000)+(75%*$200,000)

= $94,500+$150,000 = $244,500