Silver Company makes a product that is very popular as a Mother’s
Question: 9-1 Silver Company makes a product that is very products…
Silver 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:
|Budgeted sales (all on account)||$450,000||$650,000||$250,000||$1,350,000|
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 $380,000, and March sales totaled $410,000.
- Prepare a schedule of expected cash collections from sales, by month and in total, for the second quarter.
|Schedule of Expected Cash Collections|
|Total cash collections||$0||$0||$0||$0|
- Assume that the company will prepare a budgeted balance sheet as of June 30. Compute the accounts receivable as of that date.
|Total accounts receivable at June 30||$0|