1 eBook Print 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 $ 390,000 Play $ 590,000 June $ 230,000 Total $ 1,210,000 Budgeted sales (all on account) From past experience, the company has learned that 25% of a month's 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 $320,000, and March sales totaled $350,000 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?
1 eBook Print 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 $ 390,000 Play $ 590,000 June $ 230,000 Total $ 1,210,000 Budgeted sales (all on account) From past experience, the company has learned that 25% of a month's 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 $320,000, and March sales totaled $350,000 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?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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
$ 390,000
May
$ 590,000
June
$ 230,000
Budgeted sales (all on account)
From past experience, the company has learned that 25% of a month's 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 $320,000, and March sales totaled $350,000
Total
$ 1,210,000
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?
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