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 inthe company's sales budget for the second quarter given below:April$ 430,000Мay$ 630,000JuneTotalBudgeted sales (all on account)$ 200,000$ 1,260,000From past experience, the company has learned that 25% of a month's sales are collected in the month of sale, another 60% arecollected in the month following sale, and the remaining 15% are collected in the second month following sale. Bad debts arenegligible and can be ignored. February sales totaled $360,000, and March sales totaled $390,000.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?Complete this question by entering your answers in the tabs below.Required 1Required 2Prepare a schedule of expected cash collections from sales, by month and in total, for the second quarter.Schedule of Expected Cash CollectionsAprilMayJuneTotalFebruary salesMarch salesApril salesMay salesJune salesTotal cash collections2$0 $0 $%24 Silver Company makes a product that is very popular as a Mother's Day gift. Thus, peak sales occur in May of each year, as shown inthe company's sales budget for the second quarter given below:April$ 430,000MayJuneTotalBudgeted sales (all on account)$ 630,000$ 200,000$ 1,260,000From past experience, the company has learned that 25% of a month's sales are collected in the month of sale, another 60% arecollected in the month following sale, and the remaining 15% are collected in the second month following sale. Bad debts arenegligible and can be ignored. February sales totaled $360,000, and March sales totaled $390,000.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?Complete this question by entering your answers in the tabs below.Required 1Required 2What is the accounts receivable balance on June 30th?Total accounts receivable at June 30< Required 1Required 2 >

Sales will be realized as follows: 25% in the month of sale; 60% in the following month and 15% in…

Answered: Required: 1. Prepare a schedule of…

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? Compl

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter8: Budgeting For Planning And Control

Section: Chapter Questions

Problem 11CE: Shalimar Company manufactures and sells industrial products. For next year, Shalimar has budgeted...

See similar textbooks

Related questions

Q: The following is the Cash Book (Bank columns only) for Martin Cooper for June 2020. June 1 Balance…

A: Bank statement is basically reconciling an entity’s bank account with its financial records. Bank…

Q: How much should be the adjusted Cash in Bank balance as of December 31, 2020? The December 31, 2020…

A: Answer: Cash equivalents are the total value of cash on hand that includes items that are similar to…

Q: How much is the adjusted cash balance as of December 31, 2019? 5. How much is the cash shortage of…

A: Bank Reconciliation Statement: It is he statement which prepared to rectify the balance of both the…

Q: The president of the retaller Prime Products has just approached the company's bank with a purpose…

A: Cash budget is an estimate of cash receipts and cash payments for a future certain period of time.…

Q: a) Calculate Kopitiam Sdn Bud’s accounts receivable turnover ratio for Year 2 and Year 3.…

A: a) Accounts receivable turnover ratio:- net sales/average account receivables. b) Days of accounts…

Q: How much were the cash disbursement per books in June? In connection with your examination, the ABC…

A: Cash disbursement refers to the outflow of cash in exchange for the provision of goods or services…

Q: At July 31, Sunland Company has the following bank information: cash balance per bank $8,380,…

A: Adjusted cash balance per bank: Adjusted cash balance per bank is calculated by making the…

Q: Lotus fabrics wants to forecast its accounts receivable for the year 2021 with the following annual…

A: Forecast of account receivables: = Revenue forecasted * (Receivables in days / Number of days in the…

Concept explainers

Conversion Cycle

Conversion cycle is also known as cash cycle or net operating cycle. Conversion cycle refers to how much time a company takes to turn its investments which is done from stock or any other financial resources into cash flows from sales.

Question

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
$ 430,000
Мay
$ 630,000
June
Total
Budgeted sales (all on account)
$ 200,000
$ 1,260,000
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 $360,000, and March sales totaled $390,000.
Required:
1. Prepare a schedule of expected cash collections from sales, by month and in total, for the second quarter.
2. What is the accounts receivable balance on June 30th?
Complete this question by entering your answers in the tabs below.
Required 1
Required 2
Prepare a schedule of expected cash collections from sales, by month and in total, for the second quarter.
Schedule of Expected Cash Collections
April
May
June
Total
February sales
March sales
April sales
May sales
June sales
Total cash collections
2$
0 $
0 $
%24

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Halifax Shoes has 30% of its sales in cash and the remainder on credit. Of the credit sales, 65% is collected in the month of sale, 25% is collected the month after the sale, and 5% is collected the second month after the sale. How much cash will be collected in August if sales are estimated as $75,000 in June, $65,000 in July, and $90,000 in August?
Earthies Shoes has 55% of its sales in cash and the remainder on credit. Of the credit sales, 70% is collected in the month of sale, 15% is collected the month after the sale, and 10% is collected the second month after the sale. How much cash will be collected in June if sales are estimated as $75,000 in April, $65,000 in May, and $90,000 in June?
Shalimar Company manufactures and sells industrial products. For next year, Shalimar has budgeted the follow sales: In Shalimars experience, 10 percent of sales are paid in cash. Of the sales on account, 65 percent are collected in the quarter of sale, 25 percent are collected in the quarter following the sale, and 7 percent are collected in the second quarter after the sale. The remaining 3 percent are never collected. Total sales for the third quarter of the current year are 4,900,000 and for the fourth quarter of the current year are 6,850,000. Required: 1. Calculate cash sales and credit sales expected in the last two quarters of the current year, and in each quarter of next year. 2. Construct a cash receipts budget for Shalimar Company for each quarter of the next year, showing the cash sales and the cash collections from credit sales. 3. What if the recession led Shalimars top management to assume that in the next year 10 percent of credit sales would never be collected? The expected payment percentages in the quarter of sale and the quarter after sale are assumed to be the same. How would that affect cash received in each quarter? Construct a revised cash budget using the new assumption.
A companys sales for the coming months are as follows: About 20 percent of sales are cash sales, and the remainder are credit sales. The company finds that typically 10 percent of a months credit sales are paid in the month of sale, 70 percent are paid the next month, and 15 percent are paid in the second month after sale. Expected cash receipts in July are budgeted at what amount? a. 114,520 b. 143,150 c. 145,720 d. 156,000
Rehydrator makes a nutrition additive and expects to sell 3,000 units in January, 2,000 in February, 2,500 in March, 2,700 in April. and 2,900 in May. The required ending inventory is 20% of the next months sales, and the beginning inventory on January 1 was 600 units. Prepare a production budget for the first four months of the year.
Cash collections for Wax On Candles found that 60% of sales were collected in the month of the sale, 30% was collected the month after the sale, and 10% was collected the second month after the sale. Given the sales shown, how much cash will be collected in January and February?
Sports Socks has a policy of always paying within the discount period and each of its suppliers provides a discount of 2% if paid within 10 days of purchase. Because of the purchase policy, 85% of its payments are made in the month of purchase and 15% are made the following month. The direct materials budget provides for purchases of $129,582 in November, $294,872 in December, $239,582 in January, and $234,837 in February. What is the balance in accounts payable for January 31, and February 28?
Cash collections for Renew Lights found that 65% of sales were collected in the month of sale, 25% was collected the month after the sale, and 10% was collected the second month after the sale. Given the sales shown, how much cash will be collected in March and April?
One Device makes universal remote controls and expects to sell 500 units in January, 800 in February, 450 in March, 550 in April, and 600 in May. The required ending inventory is 20% of the next months sales. Prepare a production budget for the first four months of the year.
Pilsner Inc. purchases raw materials on account for use in production. The direct materials purchases budget shows the following expected purchases on account: Pilsner typically pays 25% on account in the month of billing and 75% the next month. Required: 1. How much cash is required for payments on account in May? 2. How much cash is expected for payments on account in June?
My Aunts Closet Store collects 60% of its accounts receivable in the month of sale and 35% in the month after the sale. Given the following sales, how much cash will be collected in March?
Barnstormer sells airplane accessories for $20 each. It expects sales of 120,000 units in quarter 1 and a 7% increase each subsequent quarter for the next 8 quarters. Prepare a sales budget by quarter for the first year.