ted Sites el Web Slice Gellery Previous Attempt View Slver C

ted Sites el Web Slice Gellery Previous Attempt View Slver Company makes a product that its 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 tor the second quarter given June Total Budgeted sales fall on account) $430,000 $630,000 $200 0001 260000 From past experence. the company has learned hat 25% of a monts sales are colected n the math month following sae and he remaining 15% are colected n e Of sale, another 60% are colected in the socond month sale. Bad debts are are negigible and can be ignored Fobruary saies totaled 5360,000, and March sales totaled $390 000 1 Prepare a schedule of expected cash colloctions from sales, by month and in total for the second Schedule of Expected Cash Collections May June Total February salas Mareh salks Apel saks May sales June sales Total cash collactions 2 Assuna that the company wd prepare a budgeted balance sheet as of June 30, Compute the accounts rocarvable as of that dale Total aaccounts recivable at June 30

Solution

1. Schedule of Expected cash collection

2. Accounts Recievable as of June 30

15% of the Budgeted Sales of the May will be recovered in July and 75%(60+15) of Budgeted Sales of June will be recovered in July and August respectively and hence will form part of Account Receivable.

	April	May	June	Total ($)
Febuary Sales	54000(360000*0.15)	0	0	54000
March Sales	234000(390000*0.60)	58500(390000*0.15)	0	292500
April Sales	107500(430000*0.25)	258000(430000*0.60)	64500(430000*0.15)	430000
May Sales	0	157500(630000*0.25)	378000(630000*0.60)	535500
June Sales	0	0	50000(200000*0.25)	50000
Total Cash Collection ($)	395500	474000	492500	1362000