ilver 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) $ 460,000 $660,000 $210,000 $ 1,330,000 From past experience, the company has learned that 20% of a month's sales are collected in the month of sale, another 60% are collected in the month following sale, and the remaining 20% are collected in the second month following sale. Bad debts are negligible and can be ignored. February sales totaled $390,000, and March sales totaled $420,000. 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?
ilver 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) $ 460,000 $660,000 $210,000 $ 1,330,000 From past experience, the company has learned that 20% of a month's sales are collected in the month of sale, another 60% are collected in the month following sale, and the remaining 20% are collected in the second month following sale. Bad debts are negligible and can be ignored. February sales totaled $390,000, and March sales totaled $420,000. 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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Transcribed Image Text:ilver 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) $ 460,000 $660,000 $210,000 $ 1,330,000
From past experience, the company has learned that 20% of a month's sales are collected in the
month of sale, another 60% are collected in the month following sale, and the remaining 20% are
collected in the second month following sale. Bad debts are negligible and can be ignored.
February sales totaled $390,000, and March sales totaled $420,000. 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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