Q1) Silver Company sells a product which is very popular as Mother's Day gift. Hence, peak sales happen in May of each year. These peak sales are shown in company's sales budget for second quarter (all sales are on account) are listed below:
From past experience, company has learned that 20% of month's sales are collected in month of sale, another 70% are accumulated in month following sale, and remaining 10% are collected in second month following sale. Bad debts are negligible and can be ignored. February sales totaled $230,000, and March sales totaled $260,000.
Create schedule of expected cash collections from sales, by month and in total, for second quarter.
Suppose that company will create a budgeted balance sheet as of June 30. find out accounts receivable as of that date.