1.		April	May	June	Total
	February sales:..............
	March sales:..................
	April sales: $
	May sales: $
	June sales:
	Total cash collections.....	$265,000	$336,000	$420,000	$1,021,000

Notice that even though sales peak in May, cash collections peak in June. This occurs because the bulk of the companys customers pay in the month following sale. The lag in collections that this creates is even more pronounced in some companies. Indeed, it is not unusual for a company to have the least cash available in the months when sales are greatest.

2. Accounts receivable at June 30:

From May sales:.....................................................
From June sales:....................................................
Total accounts receivable at June 30......................

EXERCISE 8-1 Schedule of Expected Cash Collections L08-2 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: Total April $300,000 May $500,000 June $200,000 Budgeted sales (all on account) ........ $1,000,000 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. Using Schedule 1 as your guide, 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