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) $330,000 $530,000 $210,000 $ 1,070,000 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 $260,000, and March sales totaled $290,000. 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 ?
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) $330,000 $530,000 $210,000 $ 1,070,000 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 $260,000, and March sales totaled $290,000. 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
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Transcribed Image Text: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) $330,000 $530,000 $210,000 $
1,070,000 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 $260,000, and March sales totaled $290,000. 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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