Question 01 Silver Company makes a product that is very 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 Budgeted sales (all on account) ........ $300,000 $500,000 $200,000 Total $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 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. February sales totaled $230,000, and March sales totaled $260,000. Required: 1. Prepare a schedule of expected cash collections from sales, by month and in total, for the second quarter 2. Assume that the company will prepare a budgeted balance sheet as of June 30. Compute the accounts receivable as of that date. Question 02 Down Under Products, Ltd., of Australia has budgeted sales of its popular boomerang for the next four months as follows: April ..... . ..... May ....... ...... June .......... .. ... July Sales in Units 50,000 75,000 90,000 80,000 The company is now in the process of preparing a production budget for the second quarter. Past experience has shown that end-of-month inventory levels must equal 10% of the following month's Required: Prepare a production budget for the second quarter; in your budget, show the number of units to be produced each month and for the quarter in total