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?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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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?
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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