0 Bloom Corp. produces one product that sells at $20 per unit and sells best on Valentine's Day and Mother's Day. As a result peak sales occur in February and May of each year. Budgeted sales in units for the first six months of the coming year are: Month January February March Units 12,000 32,000 18.000 34,000 30,000 15,000 23 14 159 April May June 25% of all sales are cash sales and the rest are on account. Past experience shows that the company collects 25% of a month's credit sales in the month of sale. Another 65% of credit sales is collected in the month following sale, and the remaining 10% of credit sales is collected in the second month following sale. Bad debts are negligible and can be ignored. To ensure that sales volumes can be met, the company requires that ending inventory for a particular month reflect 15% of next month's sales. Assume June 30 closing inventory will be 1,500 units Required: 15 16 a 17 18 Prepare a sales budget in dollars and a schedule of cash collections from sales, by month and in total, for the second quarter (10 marks). Bloom Corp Sales Budget 19 22 588388588 26 27 b] Sales in units Selling price per unit Sales Revenue Sales rough work.... Schedule of cash collections from sales April May June Quarter Cash sales $ 170,000 $ 150,000 $ 75,000 $ 395,000 April May June Quarter April Sales $ 127.500 $ 34.000 30,000 20 20 15,000 20 79,000 May Sales $ 20 $ 680,000 $ 600,000 $ 300,000 $ 1,580,000 June Sales Cash collection from sales $ 297,500 331,500 $ 112,500 $ $ 51,000 $ 510,000 292,500 56,250 $ $ 405,000 56,250 $ 594,000 + 474,750 $ 1366,250 Cash sales (25%) Sales on account (75%) 170,000 510,000 150,000 450,000 75,000 225,000 395,000 1,185,000 If the company prepares a budgeted balance sheet as of June 30, compute the accounts receivable as of that date (5 marks) Amount AR @10% of credit sales may AR @77% of credit sales june Total AR balance 45,000 168,750 $ 213,750 c Prepare a production budget by month and in total for the second quarter (5 marks) April May June Quarter Sales 34.000 30.000 15.000 79,000 Add: Closing Inventory 4.500 2,250 Less Opening Inventor 5.100 4,500 2.250 5.100 Budgeted Production