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 $ 500,000 May $ 700,000 June $ 240,000 Total $ 1,440,000 Budgeted sales (all on account) 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 $430,000, and March sales totaled $460,000. 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 $ 500,000 May $ 700,000 June $ 240,000 Total $ 1,440,000 Budgeted sales (all on account) 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 $430,000, and March sales totaled $460,000. 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.
Question
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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:
Required 1
Budgeted sales (all on account)
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 $430,000, and March sales totaled $460,000.
Required 2
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.
February sales
March sales
April sales
May sales
June sales
Total cash collections
April
$ 500,000
$
> Answer is complete but not entirely correct.
× $
X
x
0✓
0♥
0
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
$
0
X
X
X
0✔
0
May
$ 700,000
$
$
< Required 1
June
0
0
0✔
*****
X
X
June
$ 240,000
x
$
$
Total
Total
$ 1,440,000
0
0
0
0
0
0
Required 2 >
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
$ 500,000
Required 1
Budgeted sales (all on account)
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 $430,000, and March sales totaled $460,000.
Required 2
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.
May
$ 700,000
Total accounts receivable at June 30
What is the accounts receivable balance on June 30th?
June
$ 240,000
X Answer is complete but not entirely correct.
< Required 1
Total
$ 1,440,000
Required 2 >
Expert Solution
Step 1
SHEDULE OF COLLECTION FROM CUSTOMER
Schedule of Collection From Sales States the amount of Cash collected from the customer during the period.
Schedule of Collection From Sales is the estimated Analysis of Corporation based on Past events.
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