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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. These peak sales are shown in the following sales budget for the second quarter
April
May
June
Total sales
Budgeted Sales
400000
600000
300000
1300000
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.
Required - Prepare a schedule of expected cash collections from sales, by month and in total, for the second quarter.
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