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) | $400,000 | $600,000 | $190,000 | $1,190,000 |
From past experience, the company has learned that 30% of a months sales are collected in the month of sale, another 60% 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 $330,000, and March sales totaled $360,000.
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?
Prepare a schedule of expected cash collections from sales, by month and in total, for the second quarter.
What is the accounts receivable balance on June 30th?
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