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 company's sales budget for the second quarter given below: April $300,000 May June Total eted Sales $500,000 $200,000 $1,000,000 From past experience, the company has learned that 15% of the company's sales are for cash. Credit sales are collected as follows: 20% are collected in the month of sale, another 70% 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 totaled $230,000, and March sales totaled $260,000. A. Prepare a schedule of expected cash collections from sales, by month and in total, for the second quarter. B. Assume that the company will prepare a budgeted balance sheet as of June 30. Compute the accounts receivable as of that date.

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 company's sales budget for the second quarter given below: April $300,000 May June Total eted Sales $500,000 $200,000 $1,000,000 From past experience, the company has learned that 15% of the company's sales are for cash. Credit sales are collected as follows: 20% are collected in the month of sale, another 70% 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 totaled $230,000, and March sales totaled $260,000. A. Prepare a schedule of expected cash collections from sales, by month and in total, for the second quarter. B. Assume that the company will prepare a budgeted balance sheet as of June 30. Compute the accounts receivable as of that date.

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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Jasper Company has 65% of its sales on credit and 35% for cash. All credit sales are collected in full in the first month following the sale. The company budgets sales of $527,000 for April, $537,000 for May, and $562,000 for June. Total sales for March are $300,100. Prepare a schedule of cash receipts from sales for April, May, and June.
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