Question
Silver Company makes a product with peak sales in May of each year. Its sales budget for the second quarter is given below: April May
Silver Company makes a product with peak sales in May of each year. Its sales budget for the second quarter is given below:
| April | May | June | Total | |
|---|---|---|---|---|
| Budgeted sales (all on account) | $ 440,000 | $ 640,000 | $ 220,000 | $ 1,300,000 |
The company estimates 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 $370,000, and March sales totaled $400,000.
Required:
- 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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Essentials of Accounting for Governmental and Not-for-Profit Organizations
Authors: Paul A. Copley
10th Edition
007352705X, 978-0073527055
