Prepare a schedule of expected cash collections from sales

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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, as shown in the company's sales budget for the second quarter given below:

 

April

May

June

Total

Budgeted sales (all on account)

$300,000

$500,000

$200,000

$1,000,000

From past experience, the company has learned that 20 percent of a month's sales are collected in the month of sale, another 70 percent are collected in the month following sale, and the remaining 10 percent are collected in the second month following sale. Bad debts are negligible and can be ignored. February sales totaled $230,000, and March sales totaled $260,000.

Required -

1. Prepare a schedule of expected cash collections from sales, by month and in total, for the second quarter by filling in the table below (exclude dollar signs, use commas).

2. What is the accounts receivable balance on June 30 (exclude dollar signs, use commas)?

Reference no: EM133129012

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