Question
Exercise 8-1 (Algo) Schedule of Expected Cash Collections [LO8-2] Silver Company makes a product that is very popular as a Mothers Day gift. Thus, peak
Exercise 8-1 (Algo) Schedule of Expected Cash Collections [LO8-2]
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:
- 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?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Principles Of Auditing And Other Assurance Services
Authors: Ray Whittington, Kurt Pany
18th Edition
0077486277, 978-0077486273
