From past experience the company has learned that 20 of a

Reference no: EM13581136

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

April May June Total
Budgeted sales (all on account) $ 300,000 $ 500,000 $200,000 $ 1,000,000

From past experience, the company has learned that 20% of a month's sales are collected in the month of sale, another 70% 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 $230,000, and March sales totaled $260,000.

Requirement 1:

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

Requirement 2:

Assume that the company will prepare a budgeted balance sheet as of June 30. Compute the accounts receivable as of that date.

Reference no: EM13581136

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