1. Silver Company makes a product that is very popular as a Mothers Day gift. Thus, peak sales occur in May of each year, as shown in the companys sales budget for the second quarter given below:

April May June Total

Budgeted sales (all on account) $470,000 $670,000 $230,000 $1,370,000

From past experience, the company has learned that 25% of a months sales are collected in the month of sale, another 65% 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 $400,000, and March sales totaled $430,000.

Required:

1. 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

2. Assume that the company will prepare a budgeted balance sheet as of June 30. Compute the accounts receivable as of that date.

May sales:

June sales:

Total accounts receivable at June 30:

7.

Milo Company manufactures beach umbrellas. The company is preparing detailed budgets for the third quarter and has assembled the following information to assist in the budget preparation:

a.	The Marketing Department has estimated sales as follows for the remainder of the year (in units):

The selling price of the beach umbrellas is $12 per unit.

July	37,500	October	27,500
August	85,000	November	14,000
September	54,000	December	14,500

b.	All sales are on account. Based on past experience, sales are collected in the following pattern:

30%	in the month of sale
65%	in the month following sale
5%	uncollectible

Sales for June totaled $408,000.

c.	The company maintains finished goods inventories equal to 15% of the following months sales. This requirement will be met at the end of June.

d.	Each beach umbrella requires 4 feet of Gilden, a material that is sometimes hard to acquire. Therefore, the company requires that the ending inventory of Gilden be equal to 50% of the following months production needs. The inventory of Gilden on hand at the beginning and end of the quarter will be:

June 30	89,250	feet
September 30	?	feet

e.	Gilden costs $0.60 per foot. One-half of a months purchases of Gilden is paid for in the month of purchase; the remainder is paid for in the following month. The accounts payable on July 1 for purchases of Gilden during June will be $47,490.

Required:

1-a.	Prepare a sales budget, by month and in total, for the third quarter.

1-b.	Prepare a schedule of expected cash collections, by month and in total, for the third quarter.

2.	Prepare a production budget for each of the months JulyOctober.

3-a.	Prepare a direct materials budget for Gilden,, by month and in total, for the third quarter. (Round your Unit cost of raw materials to 2 decimal places.)

3-b.	Prepare a schedule of expected cash disbursements for Gilden,, by month and in total, for the third quarter.