Part 2 Sillyar Company makes a product that is yery popular as a Mother's Day gift. Thus, peak sales occur in May of each year, as shown in the company's sales budget for the second quarter given below. April May June Quarter Total Budgeted sales {all on account} 5 300,000 5 500,000 5 200,000 5 1,000,000 From past experience, the company has learned that 20% of a month's sales are collected in the month of sale, another ?0% are collected in the month following sale, and the remaining 10% are collected in the second month following sale. Bad debts that are uncollectible from customers are negligible and can be ignored. February sales totalled $230,000, and March sales totalled $260,000. Requirements: (Hint: For each of the following requirements, copy the template found in the corresponding Exhibit provided into your team project document and complete it.) 1. Prepare a schedule of expected cash collections from sales, by month and in total, for the second quarter. Use the table in Exhibit #1. 2. Which month has the highest accrual sales that would appear on the income statement? Which month has the highest cash collections? Is it the same month? If so, why, if not, why not? Explain. 3. Assume that the company will prepare a budgeted balance sheet as of June 30. Calculate the accounts receivable as of that date. Exhibit #1 SillyarCompany Schedule of Expected Cash Collections Cash Collected Cash Collected Cash Collected April May June Total February sales ................................................ March sales ..................................... April sales ........................................ May sales ........................................................ June sales ........................................ Total cash collections