eztomneducationcomhmtpx 43 Siver Company makes a product tha

ezto.mneducation.com/hm.tpx 43. Siver 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 Apri May June Budgeted sales (all on account) $380,000 $580,000 $200,000 $1,160,000 From past experience, the company has learned that 20% of a months sales are collected in the month of sale, another 60% are collected in the month following sale, and the remaining 20% are colected in the second month following sale. Bad debts are negligible and can be ignored. February sales totaled $310,000, and March sales totaled $340,000 Required: 1. Prepare a schedule of expected cash collections from sales, by month and in total, for the second quarter Schedule of Expected Cash Collections May Total February sales March sales April sales May sales June sales Total cash collections 2 Assume that the company will prepare a budgoted balance sheet as of Jane 30. Compute the accounts recelrable as of that date May sales June sales Total accounts recelvable at June 30

Solution

1.

Schedule of Expected Cash Collections

2.

May sales (580,000-464,000)	116,000
June sales (200,000-40,000)	160,000
Total accounts receivable at June 30	$276,000