Silver Company makes a product that is very popular as a Mothers Day gift. Thus, peak sales
Question:
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) $370,000 $570,000 $180,000 $1,120,000 From past experience, the company has learned that 25% of a month’s sales are collected in the month of sale, another 65% 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. February sales totaled $300,000, and March sales totaled $330,000.
Required:
1.) Prepare a schedule of expected cash collections from sales, by month and in total, for the second quarter.
2.) Assume that the company will prepare a budgeted balance sheet as of June 30. Compute the accounts receivable as of that date.
Managerial Accounting
ISBN: 978-0697789938
13th Edition
Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer