The following information applies to the questions displayed below.
Midwest Products is a wholesale distributor of leaf rakes. Thus, peak sales occur in August of each year as shown in the company’s sales budget for the third quarter, given below:
July
|
August
|
September
|
Total
|
|
Budgeted sales (all on account)
|
$ 553,000
|
$ 808,000
|
$ 496,000
|
$ 1,857,000
|
From past experience, the company has learned that 15% of a month’s 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 $426,000, and June sales totaled $533,000.
2. Required information:
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.)
Schedule of Expected Cash Collections
|
|
July
|
August
|
September
|
Total
|
May sales
|
$
|
$
|
$
|
$
|
June sales
|
|
|
|
|
July sales
|
|
|
|
|
August sales
|
|
|
|
|
September sales
|
|
|
|
|
Total cash collections
|
$
|
$
|
$
|
$
|
3. Required information:
2.Assume that the company will prepare a budgeted balance sheet as of September 30. Compute the accounts receivable as of that date.(Do not round intermediate calculations.)
Total accounts receivable
|
$
|