# 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:

 April May June Total 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.

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 April May June Total February sales \$0 March sales 0 April sales 0 May sales 0 June sales 0 Total cash collections \$0 \$0 \$0 \$0
1. Assume that the company will prepare a budgeted balance sheet as of June 30. Compute the accounts receivable as of that date.
 May sales June sales Total accounts receivable at June 30 \$0