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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.
$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?
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- Schedule of Expected Cash Collections 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: 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 month following 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?arrow_forwardCurrent Attempt in Progress The management of Riverbed Industries estimates that credit sales for August, September, October, and November will be $575,000, $700,000, $875,000, and $490,000, respectively. Experience has shown that collections are made as follows: In month of sale 25% In first month after sale 60% In second month after sale 10% Determine the collections from customers in October and November. (Do not leave any field blank. Enter O for the amounts.) October November Collections from Customers August Sales September Sales October Sales November Sales 2$ $. Total budgeted collections eTextbook and Media Attempts: 0 of 3 used Submit Answer. Savetor La hp %24 %24arrow_forwardQuestion 2: Avril Company makes collections on sales according to the below schedule. The Treasury Manager conducts an analysis of the cash collection and determines that cash collection target for March should be $150,000. Evaluate whether the collection target for March is correct and summarize your recommendations. Month Expected Sales January $ 100,000 February $ 120,000 March $ 110,000 30% in the month of sale 60% in the month following sale 10% in the second month following salearrow_forward
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- Principles of Accounting Volume 2AccountingISBN:9781947172609Author:OpenStaxPublisher:OpenStax College