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)	$ 360,000	$ 560,000	$ 220,000	$ 1,140,000

From past experience, the company has learned that 30% of a months sales are collected in the month of sale, another 60% 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 $290,000, and March sales totaled $320,000.

Required:

Prepare a schedule of expected cash collections from sales, by month and in total, for the second quarter.

What is the accounts receivable balance on June 30th?

2.

Down Under Products, Limited of Australia has budgeted sales of its popular boomerang for the next four months as follows:

	Unit Sales
April	64,000
May	80,000
June	104,000
July	87,000

The company is now in the process of preparing a production budget for the second quarter. Past experience has shown that end-of-month inventory levels must equal 15% of the following months unit sales. The inventory at the end of March was 9,600 units.

Required:

Prepare a production budget by month and in total, for the second quarter.