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 in the company's sales budget for the second quarter given below April June Budgeted sales (all on account) May $500,000 Total $1,000,000 $300,000 $200,000 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 remaining 10% are collected in the second month following sale. Bad debts are negligible and can be ignored. February sales totaled $230,000, and March sales totaled $260,000 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 collections

Answer 1

	Feb	Mar	April	May	June
Budgeted Sales	230,000	260,000	300,000	500,000	200,000
Schedule of Expected Collections
	April	May	June	Total
Feb Sales	46,000			46,000
Mar Sales	182,000	52,000		234,000
Apr Sales	60,000	210,000	30,000	300,000
May Sales		100,000	350,000	450,000
June Sales			40,000	40,000
Total Cash collections	288,000	362,000	420,000	1,070,000
Accounts receivables balance on June 30
from May Sales	50,000
From June Sales	160,000
Accounts receivables balance on June 30	210,000