Question
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
| 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: |
| April | May | June | Total | |
| Budgeted sales (all on account) | $420,000 | $620,000 | $240,000 | $1,280,000 |
| From past experience, the company has learned that 20% of a months sales are collected in the month of sale, another 65% 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 $350,000, and March sales totaled $380,000. |
| Required: | |
| 1. | Prepare a schedule of expected cash collections from sales, by month and in total, for the second quarter. |
Schedule of Expected Cash Collections
April . May . June . July . Total
Febuary Sales
March Sales
April Sales
May Sales
June Sales
Total Cash Collections
2) Assume that the company will prepare a budgeted balance sheet as of June 30. Compute the accounts receivable as of that date.
May Sales . _________
June Sales . ___________
Total accounts recievable at June 30 ___________
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Managerial Accounting
Authors: Carl L. Moore
5th Edition
0538019409, 978-0538019408
