Exercise 81 Schedule of Expected Cash Collections LO82 20 po

Exercise 8-1 Schedule of Expected Cash Collections [LO8-2) 20 points 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 April 430,000 $630,000 $200,000.260,000 Budgeted sales (all on aceount y From past experience, the company has learned that 25% of a month\'s sales are collected in the month of sale, another 60% are collected in the month following sale, and the remaining 15% are collected in the second month following sale. Bad debts are negligible and can be ignored. February sales totaled $360,000, and March sales totaled $390,000 Required: 1. Prepare a schedule of expected cash collections from sales, by month and in total, for the second quarter 2. What is the accounts receivable balance on June 30th? Relerences Complete this question by entering your answers in the tabs below

Solution

Silver company Schedule of expected cash collections Month Total monthly sales ($) Collection April May June February 360000 54000 March 390000 234000 58500 April 430000 107500 258000 64500 May 630000 157500 378000 June 200000 50000 Total Collection 395500 474000 492500 Collection in April = 15% * $360000 + 60% of $390000 + 25% of $430000. The other onths have been calculated in the same way. 2) Silver company Accounts Receivable at June 30 May sales (15%*630000) 94500 June Sales (60%*200000)+ (15%*200000) 150000 Total ($) 244500