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: ### Silver Company's Sales Budget and Cash Collections ScheduleSilver Company makes a product that is very popular as a Mother’s Day gift. Thus, peak sales occur in May of each year, as indicated in the company’s sales budget for the second quarter, shown below:| | April | May | June | Total ||-------------------|-------|-------|-------|------------|| **Budgeted sales (all on account)** | $300,000 | $500,000 | $200,000 | $1,000,000 |Based on past experience, the company follows a specific pattern for collecting sales revenue:- 20% of a month’s sales are collected in the month of sale.- 70% are collected in the month following sale.- The remaining 10% are collected in the second month following sale.- Bad debts are negligible and can be ignored.Additional Information:- February sales totaled $230,000.- March sales totaled $260,000.### Required:1. **Prepare a schedule of expected cash collections from sales, by month and in total, for the second quarter.**2. **Determine the accounts receivable balance on June 30th.**### Expected Cash Collections:1. **From February sales (Total = $230,000):** - March: 70% of $230,000 = $161,000 - April: 10% of $230,000 = $23,0002. **From March sales (Total = $260,000):** - April: 70% of $260,000 = $182,000 - May: 10% of $260,000 = $26,0003. **From April sales (Total = $300,000):** - April: 20% of $300,000 = $60,000 - May: 70% of $300,000 = $210,000 - June: 10% of $300,000 = $30,0004. **From May sales (Total = $500,000):** - May: 20% of $500,000 = $100,000 - June: 70% of $500,000 = $350,000 - July: 10% of $500,000 = $50,000 (Not collected in the second quarter)5 ### Understanding Silver Company's Sales Budget and Cash Collection Schedule**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) | $300,000 | $500,000 | $200,000 | $1,000,000 |From past experience, the company has learned that:- 20% of a month’s sales are collected in the month of sale- Another 70% are collected in the month following sale- The remaining 10% are collected in the second month following saleBad debts are negligible and can be ignored. February sales totaled $230,000, and March sales totaled $260,000.#### Required Tasks:1. Prepare a schedule of expected cash collections from sales, by month and in total, for the second quarter.2. Determine the accounts receivable balance on June 30th.#### Schedule of Expected Cash Collections:Below is the template provided for the schedule:| | April | May | June | Total ||------------------------------|-------|-------|-------|--------|| February sales | | | | $0 || March sales | | | | $0 || April sales | | | | $0 || May sales | | | | $0 || June sales | | | | $0 || **Total cash collections** | $0 | $0 | $0 | $0 |##### Explanation of Graphs/Diagrams:1. **Schedule of Expected Cash Collections Table**: - The table aims to capture the expected cash inflows from sales for April, May, and June. - Each row represents the sales from a particular month and how they are collected over April, May, and June. - The 'Total' column will show the sum of collections for each sales period over the three months.**Steps to Complete the Schedule:**1. Factor in February sales to be collected in April (10% of $230,000), March collections, etc.2. Follow a similar approach

Budgeting -Budgeting is the process of estimating future operations based on past performance. % are…

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 $300,000 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 70% are collected in the month following sale, and the remaining 10% are collected in the second month following sale. Bad debts are negligible and can be ignored. February sales totaled $230,000, and March sales totaled $260,000. Complete this question by entering your answers in the tabs below. Required 2 May $500,000 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? What is the accounts receivable balance on June 30th? Total accounts receivable at June 30 June $200,000 Total $1,000,000

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 $300,000 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 70% are collected in the month following sale, and the remaining 10% are collected in the second month following sale. Bad debts are negligible and can be ignored. February sales totaled $230,000, and March sales totaled $260,000. Complete this question by entering your answers in the tabs below. Required 2 May $500,000 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? What is the accounts receivable balance on June 30th? Total accounts receivable at June 30 June $200,000 Total $1,000,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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