Exercise 8-1 Schedule of Expected Cash Collections [LO2]

Please explain how you arrived at your answers. This really helps me a lot! Thank you!

[The following information applies to the questions displayed below.]

Midwest Products is a wholesale distributor of leaf rakes. Thus, peak sales occur in August of each year as shown in the companys sales budget for the third quarter, given below:

July August September Total Budgeted sales (all on account) $596,000 $ 836,000 $ 494,000 $1,926,000

From past experience, the company has learned that 20% of a months 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. May sales totaled $407,000, and June sales totaled $511,000.