12 120 points Midwest Products is a wholesale distributor of

12. 120 points Midwest Products is a wholesale distributor of leaf rakes. Thus, peak sales occur in August of each year as shown in the company\'s sales budget for the third quarter, given below Budgeted sales (all on account) $598,000 836,000 $480,000 $1,914.000 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, and the remaining 10% are collected in the second month following sale. Bad debts are negligible and can be ignored. May sales totaled $416.000. and June sales totaled $531,000. Required 1. Prepare a schedule of expected cash collections from sales, by month and in total, for the third quarter (Do not round intermediate calculations.) Schedule of Expected Cash Collections July August September Total May sales June sales July sales August sales September sales Total cash collections 2. Assume that the company will prepare a budgeted balance sheet as of September 30. Compute the sccounts receivable as of that date. (Do not round intermediate calculations.) August sales September sales Total sccounts receivable

Solution

1) Budgeted cash collection :

2) September 30 account receivable :

	July	August	september	Total
May sales	41600			41600
June sales	371700	53100		424800
July Sales	119600	418600	59800	598000
August sales		167200	585200	752400
September sales			96000	96000
Total cash collection	532900	638900	741000	1912800