Chapter 8, Problem 1E

Schedule of Expected Cash Collections LOB-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 salesbudget for the second quarter given below:

From 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 monthfollowing sale, and the remaining 10% 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. Using Schedule 1 as your guide, 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?