E8–1 Time allowed: 20 minutes Silver Company makes a product that has peak sales in May of each year.

These peak sales are shown in the company’s sales budget for the second quarter given below:

From past experience, the company has learned that 20% of a month’s sales are collected in the month of sale, that another 70% is collected in the month following sale, and that the remaining 10% is collected in the second month following sale. Bad debts are negligible and can be ignored. February sales totalled £230,000 and March sales totalled £260,000.
Required

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April May Budgeted sales 300,000 500,000 June 200,000 Total 1,000,000