Silver Company makes a product that is very popular as a Mothers Day gift. Thus, peak sales
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 in the companys sales budget for the second quarter given below:
| April | May | June | Total | |
| Budgeted sales (all on account) | $430,000 | $630,000 | $200,000 | $1,260,000 |
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 $360,000, and March sales totaled $390,000.
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?
Expert Answer:
Accounting Information Systems
ISBN: 9780132871938
11th Edition
Authors: George H. Bodnar, William S. Hopwood
