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 $ 320,000 May $ 520,000 June $ 180,000 Total $ 1,020,000 Budgeted sales (all on account) From past experience, the company has learned that 30% of a month's sales are collected in the month of sale, another 65% are collected in the month following sale, and the remaining 5% are collected in the second month following sale. Bad debts are negligible and can be ignored. February sales totaled $250,000, and March sales totaled $280,000. 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 $ 320,000 May $ 520,000 June $ 180,000 Total $ 1,020,000 Budgeted sales (all on account) From past experience, the company has learned that 30% of a month's sales are collected in the month of sale, another 65% are collected in the month following sale, and the remaining 5% are collected in the second month following sale. Bad debts are negligible and can be ignored. February sales totaled $250,000, and March sales totaled $280,000. 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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Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
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![Exercise 8-1 (Algo) Schedule of Expected Cash Collections [LO8-2]
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
$ 320,000
May
$ 520,000
June
$ 180,000
Total
$ 1,020,000
Budgeted sales (all on account)
From past experience, the company has learned that 30% of a month's sales are collected in the month of sale, another 65% are
collected in the month following sale, and the remaining 5% are collected in the second month following sale. Bad debts are negligible
and can be ignored. February sales totaled $250,000, and March sales totaled $280,000.
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?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fcb78f270-b29f-4df2-98c8-b80bb2ba3130%2F406583d0-6a72-4979-bdd2-41e60abd003d%2Feusblz_processed.png&w=3840&q=75)
Transcribed Image Text:Exercise 8-1 (Algo) Schedule of Expected Cash Collections [LO8-2]
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
$ 320,000
May
$ 520,000
June
$ 180,000
Total
$ 1,020,000
Budgeted sales (all on account)
From past experience, the company has learned that 30% of a month's sales are collected in the month of sale, another 65% are
collected in the month following sale, and the remaining 5% are collected in the second month following sale. Bad debts are negligible
and can be ignored. February sales totaled $250,000, and March sales totaled $280,000.
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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