Question

Saved Chapter08-Homework(E8-1,2,3,578) Exercise 8-1 Schedule of Expected Cash Collections [LO8-2] 1 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 10 points April $400,000 Total $1,190,000 May $600,000 June Budgeted sales (all on account) $190,000 Sipped 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 remaining 10 % are collected in the second month following sale. Bad debts are negligible and can be ignored February sales totaled $330,000, and March sales totaled $360,000 ebook 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. References 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 Apri May June Total February sales March sales S Apil sales May salos 0 0 June sales 0 Tetal cash collections 0 CReqred 11 Required 2

Answer 1

1.

Schedule of expected cash collections for the second quarter.
Particulars	April	May	June	Total
Collection of:
Feb	33,000			33,000
March	216,000	36,000		252,000
April	120,000	240,000	40,000	400,000
May		180,000	360,000	540,000
June			57,000	57,000
Total Collection	369,000	456,000	457,000	1,282,000

Working:

Working for expected cash collection
Particulars	Feb	March	April	May	June
Sales	330,000	360,000	400,000	600,000	190,000
Collection:
Same month (30%)	99,000	108,000	120,000	180,000	57,000
Following month (60%)		198,000	216,000	240,000	360,000
Next following month (10%)			33,000	36,000	40,000

2.

Schedule of Account Receivable month wise
Particulars	April	May	June
Current month (60% of current month Sales)	240,000	360,000	114,000
Last Month (10% of last month sales)	36,000	40,000	60,000
Total Account Receivable as on end of the month	276,000	400,000	174,000

Therefore, Account receivable balance at June, 30 will be $174,000