Reference no: EM132743347
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 on account P300,000 P500,000 P200,000 P1,000,000
From the 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 cam be ignored. February sales totalled P230,000, and March sales totalled P260,000.
Problem 1. Prepare schedule of expected cash collections from sales, by month and in total, for the second quarter.
Problem 2. Assume that the company will prepare budgeted statement of financial position as of June 30. Compute the accounts receivable as of that date.
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