Question

 1. 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. These peak sales are shown in the company's sales budget for the second quarter given below:

 From past experience, the company has learned that 15% of the company's sales are for cash. Credit sales are collected as follows: 20% are collected in the month of sale,

 another 70% are collected in the month following the sale, and the remaining 10% are collected in the second month following the sale. Bad debts are negligible and can be ignored. February sales totaled $230,000, and March sales totaled $260,000.

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

 B. Assume that the company will prepare a budgeted balance sheet as of June 30. Compute the accounts receivable as of that date.

Answer 1

A. Amount are in Dollars

B. Amount of accounts receivables = $178,500

Workings

Amount of receivables

from May sales = 425000*10% = 42,500

from June sales = 170000*80% = 136000

Total receivables = 178500

Please hit LIKE button if this helped. For any further explanation, please put your query in comment, will get back to you.