Problem $6$

Munson Company makes a variety of gardening related items. Thus, peak sales are during spring months as shown by the second quarter below:

April May June Total

Budgeted Sales $$550,000$$$600,000$$$450,000$$$1,600,000$

Note: All sales are on account

Based on experience, the company has learned that $25\%$ of the month's sales are collected in the month of sale, another $70\%$ is collected in the month following sale, and the remaining $5\%$ is collected the second month following the sale. Bad debts are negligible and can be ignored. February sales were $$300,000$ and March sales totaled $$420,000.$

Required:

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

Assume the company will prepare a budgeted balance sheet as of June $30.$ Compute the accounts receivable as of that date.