Silver Company makes a product that is very popular as a Mother's Day gift. Thus, peak sales occur in May of each year. These peak sales are shown in the following sales budget for the second quarter: Budgeted sales April $400,000 February sales March sales May $600,000 April sales May sales From past experience, the company has learned that 25% of a month's sales are collected in the month of sale, another 65% are collected in the month following the sale, and the remaining 10% are collected in the second month following the sale. Bad debts are negligible and can be ignored. February sales totalled $380,000, and March sales totalled $360,000. Required: 1. Prepare a schedule of expected cash collections from sales, by month and in total, for the second quarter. June $300,000 SILVER COMPANY Schedule of Expected Cash Collections May April June Total $1,300,000 Total
Silver Company makes a product that is very popular as a Mother's Day gift. Thus, peak sales occur in May of each year. These peak sales are shown in the following sales budget for the second quarter: Budgeted sales April $400,000 February sales March sales May $600,000 April sales May sales From past experience, the company has learned that 25% of a month's sales are collected in the month of sale, another 65% are collected in the month following the sale, and the remaining 10% are collected in the second month following the sale. Bad debts are negligible and can be ignored. February sales totalled $380,000, and March sales totalled $360,000. Required: 1. Prepare a schedule of expected cash collections from sales, by month and in total, for the second quarter. June $300,000 SILVER COMPANY Schedule of Expected Cash Collections May April June Total $1,300,000 Total
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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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. These peak
sales are shown in the following sales budget for the second quarter:
Budgeted sales
April
$400,000
May
$600,000
February sales
March sales
April sales
May sales
From past experience, the company has learned that 25% of a month's sales are collected in the month of sale, another 65% are
collected in the month following the sale, and the remaining 10% are collected in the second month following the sale. Bad debts are
negligible and can be ignored. February sales totalled $380,000, and March sales totalled $360,000.
Required:
1. Prepare a schedule of expected cash collections from sales, by month and in total, for the second quarter.
SILVER COMPANY
Schedule of Expected Cash Collections
April
May
June
$300,000
June
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Total
Total
$1,300,000
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Required:
1. Prepare a schedule of expected cash collections from sales, by month and in total, for the second quarter.
SILVER COMPANY
Schedule of Expected Cash Collections
April
May
February sales
March sales
April sales
May sales
June sales
Total cash collections
June
Accounts receivable
2. Assume that the company will prepare a budgeted balance sheet as of June 30. Compute the accounts receivable as of that c
Total
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