Silver Company makes a product that is very popular as a Mother's Day gift. Thus, peak...

 

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Silver Company makes a product that is very popular as a Mother's Day gift. Thus, peak sales occur in May of each year. These peak sales are shown in the following sales budget for the second quarter: Budgeted sales April $400,000 February sales March sales April sales May sales June sales Total cash collections $ 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 the sale, and the remaining 10% are collected in the second month following the sale. Bad debts are negligible and can be ignored. February sales totalled $380,000, and March sales totalled $360,000. Accounts receivable May $600,000 Required: 1. Prepare a schedule of expected cash collections from sales, by month and in total, for the second quarter. SILVER COMPANY Schedule of Expected Cash Collections April May June 0 $ 05 June $300,000 0 $ Total $1,300,000 Total 0 2. Assume that the company will prepare a budgeted balance sheet as of June 30. Compute the accounts receivable as of that date. Silver Company makes a product that is very popular as a Mother's Day gift. Thus, peak sales occur in May of each year. These peak sales are shown in the following sales budget for the second quarter: Budgeted sales April $400,000 February sales March sales April sales May sales June sales Total cash collections $ 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 the sale, and the remaining 10% are collected in the second month following the sale. Bad debts are negligible and can be ignored. February sales totalled $380,000, and March sales totalled $360,000. Accounts receivable May $600,000 Required: 1. Prepare a schedule of expected cash collections from sales, by month and in total, for the second quarter. SILVER COMPANY Schedule of Expected Cash Collections April May June 0 $ 05 June $300,000 0 $ Total $1,300,000 Total 0 2. Assume that the company will prepare a budgeted balance sheet as of June 30. Compute the accounts receivable as of that date.

Answer rating: 100% (QA)

Answer Answer 1 Schedule of expected cash collections from sales April May June Total se... View the full answer