Solution-Prepare a schedule of expected cash collections

Prepare a schedule of expected cash collections from sales

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Reference no: EM133532991

Case Study: 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) $ 500,000 $ 700,000 $ 240,000 $ 1,440,000

From experience, the company has learned that 20% of a month's sales are collected in the month of sale, another 60% are collected in the month following the sale, and the remaining 20% are collected in the second month following the sale. Bad debts are negligible and can be ignored. February sales totaled $430,000, and March sales totaled $460,000.

Required:

1. Prepare a schedule of expected cash collections from sales, by month and in total, for the second quarter.

2. What is the accounts receivable balance on June 30th?

Reference no: EM133532991

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Prepare a schedule of expected cash collections from sales

Reference no: EM133532991

Reference no: EM133532991

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