Question
Exercise 8-1 (Algo) Schedule of Expected Cash Collections [LO8-2] Silver Company makes a product with peak sales in May of each year. Its sales budget
Exercise 8-1 (Algo) Schedule of Expected Cash Collections [LO8-2]
Silver Company makes a product with peak sales in May of each year. Its sales budget for the second quarter is given below:
| April | May | June | Total | |
|---|---|---|---|---|
| Budgeted sales (all on account) | $ 360,000 | $ 560,000 | $ 220,000 | $ 1,140,000 |
The company estimates 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?
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
Internal Auditing An Integrated Approach
Authors: Richard Cascarino
1st Edition
0702166693, 978-0702166693
