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) $ 420,000 $ 620,000 $ 240,000 $ 1, 280, 000 From past experience, the company has learned that 20% of a month's sales are collected in the month of sale, another 65% 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 $350,000, and March sales totaled $380,000. 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) $ 420,000 $ 620,000 $ 240,000 $ 1, 280, 000 From past experience, the company has learned that 20% of a month's sales are collected in the month of sale, another 65% 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 $350,000, and March sales totaled $380,000. 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) $ 420,000 $ 620,000 $ 240,000 $ 1, 280, 000 From past experience, the
company has learned that 20% of a month's sales are collected in the month of sale, another 65% 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 $350,000, and March sales totaled
$380,000. 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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