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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, as shown in the company's sales budget for the second quarter given below: April $ 500,000 May $ 700,000 June $ 240,000 Total $ 1,440,000 Budgeted sales (all on account) From past 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 sale, and the remaining 20% are collected in the second month following 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?

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 $ 500,000 May $ 700,000 June $ 240,000 Total $ 1,440,000 Budgeted sales (all on account) From past 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 sale, and the remaining 20% are collected in the second month following 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?

EBK CFIN
EBK CFIN
6th Edition
ISBN:9781337671743
Author:BESLEY
Publisher:BESLEY
Chapter15: Managing Short-term Assets
Section: Chapter Questions
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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, as shown in the company's sales budget for the second quarter given below: Required 1 Budgeted sales (all on account) From past 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 sale, and the remaining 20% are collected in the second month following sale. Bad debts are negligible and can be ignored. February sales totaled $430,000, and March sales totaled $460,000. Required 2 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? Complete this question by entering your answers in the tabs below. February sales March sales April sales May sales June sales Total cash collections April $ 500,000 $ > Answer is complete but not entirely correct. × $ X x 0✓ 0♥ 0 Prepare a schedule of expected cash collections from sales, by month and in total, for the second quarter. Schedule of Expected Cash Collections April May $ 0 X X X 0✔ 0 May $ 700,000 $ $ < Required 1 June 0 0 0✔ ***** X X June $ 240,000 x $ $ Total Total $ 1,440,000 0 0 0 0 0 0 Required 2 >
Transcribed Image Text: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: Required 1 Budgeted sales (all on account) From past 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 sale, and the remaining 20% are collected in the second month following sale. Bad debts are negligible and can be ignored. February sales totaled $430,000, and March sales totaled $460,000. Required 2 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? Complete this question by entering your answers in the tabs below. February sales March sales April sales May sales June sales Total cash collections April $ 500,000 $ > Answer is complete but not entirely correct. × $ X x 0✓ 0♥ 0 Prepare a schedule of expected cash collections from sales, by month and in total, for the second quarter. Schedule of Expected Cash Collections April May $ 0 X X X 0✔ 0 May $ 700,000 $ $ < Required 1 June 0 0 0✔ ***** X X June $ 240,000 x $ $ Total Total $ 1,440,000 0 0 0 0 0 0 Required 2 >
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 $ 500,000 Required 1 Budgeted sales (all on account) From past 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 sale, and the remaining 20% are collected in the second month following sale. Bad debts are negligible and can be ignored. February sales totaled $430,000, and March sales totaled $460,000. Required 2 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? Complete this question by entering your answers in the tabs below. May $ 700,000 Total accounts receivable at June 30 What is the accounts receivable balance on June 30th? June $ 240,000 X Answer is complete but not entirely correct. < Required 1 Total $ 1,440,000 Required 2 >
Transcribed Image Text: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 $ 500,000 Required 1 Budgeted sales (all on account) From past 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 sale, and the remaining 20% are collected in the second month following sale. Bad debts are negligible and can be ignored. February sales totaled $430,000, and March sales totaled $460,000. Required 2 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? Complete this question by entering your answers in the tabs below. May $ 700,000 Total accounts receivable at June 30 What is the accounts receivable balance on June 30th? June $ 240,000 X Answer is complete but not entirely correct. < Required 1 Total $ 1,440,000 Required 2 >
Expert Solution
Step 1

 

SHEDULE OF COLLECTION FROM CUSTOMER

Schedule of Collection From Sales States the amount of Cash collected from the customer during the period.

Schedule of Collection From Sales is the estimated Analysis of Corporation based on Past events.

 

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