Peak sales for Midwest Products, a wholesale distributor of leaf rakes, occur in August. The companys sales budget for the third quarter showing these peak sales is given below: From past experience, the company has learned that 20% of a months sales are collected in the month of sale, another 70% are collected in the month following sale, and the

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Peak sales for Midwest Products, a wholesale distributor of leaf rakes, occur in August. The company€™s sales budget for the third quarter showing these peak sales is given below:

Peak sales for Midwest Products, a wholesale distributor of leaf

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 $430,000, and June sales totaled $540,000.

Required:
1. Prepare a schedule of expected cash collections from sales, by month and in total, for the third quarter.
2. Assume that the company will prepare a budgeted balance sheet as of September 30. Compute the accounts receivable as of thatdate.

Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...
Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
Related Book For answer-question

Managerial Accounting

12th Edition

Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer

ISBN: 9780073526706