Midwest Products is a wholesale distributor of leaf rakes. Thus, peak sales occu
ID: 2375081 • Letter: M
Question
Midwest Products is a wholesale distributor of leaf rakes. Thus, peak sales occur in August of each year as shown in the company%u2019s sales budget for the third quarter, given below:
July
August
September
Total
Budgeted sales (all on account)
$559,000
$ 874,000
$ 455,000
$1,888,000
From past experience, the company has learned that 15% of a month%u2019s sales are collected in the month of sale, another 75% 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. May sales totaled $405,000, and June sales totaled $512,000.
1.
Required:
1.
Prepare a schedule of expected cash collections from sales, by month and in total, for the third quarter. (Do not round intermediate calculations. Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.)
Schedule of Expected Cash Collections
July
August
September
Total
May sales
$
$
$
$
June sales
July sales
August sales
September sales
Total cash collections
$
$
$
$
2.
Midwest Products is a wholesale distributor of leaf rakes. Thus, peak sales occur in August of each year as shown in the company%u2019s sales budget for the third quarter, given below: