Silver Company makes a product that is very popular as a Mothers Day gift. Thus, peak sales occur in May of each year, as shown in the companys sales budget for the second quarter given below:

Budgeted sales (all on account)

April $390,000

May $590,000

June $230,000

Total $1,210,000

From past experience, the company has learned that 25% of a months sales are collected in the month of sale, another 60% are collected in the month following sale, and the remaining 15% are collected in the second month following sale. Bad debts are negligible and can be ignored. February sales totaled $320,000, and March sales totaled $350,000. Required:

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

2. What is the accounts receivable balance on June 30th?

Schedule of Expected Cash Collections April May June Total February sales $ 0 March sales 0 0 April sales May sales June sales 0 0 Total cash collections $ 0 $ 0 $ 0 $ 0