Can you please do this? Silver Company makes a product that is very popular as a
ID: 2578469 • Letter: C
Question
Can you please do this?
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.
Prepare a schedule of expected cash collections from sales, by month and in total, for the second quarter.
Assume that the company will prepare a budgeted balance sheet as of June 30. Compute the accounts receivable as of that date.
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:
Explanation / Answer
April May June Total February sales 23000 23000 March sales 182000 182000 April sales 60000 210000 30000 300000 May sales 100000 350000 450000 June sales 40000 40000 Total cash collections 265000 310000 420000 995000 2 Accounts receivable as of that date = (500000*10%)+(200000*80%)= 210000