Silver Company makes a product that is very popular as a Mothers Day gift. Thus, peak sales

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, ad shown in the company’s sales budget for the second quarter given below:

May Total June April S1,000,000 Budgeted sales (all account) $300,000 on $500,000 S200,000

From past experience, the company has learned that 20% of 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: Assume that the company will prepare a budgeted balance sheet as of June 30. Compare the accounts receivable as of that date.

Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...