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:
![597_1.png](https://secure.tutorsglobe.com/CMSImages/597_1.png)
From past experience, the company has learned that 25% of a month’s sales are collected in the month of sale, another 70% are collected in the month following sale, and the remaining 5% are collected in the second month following sale. Bad debts are negligible and can be ignored. February sales totaled $280,000, and March sales totaled $310,000.
Required:
1. Prepare a schedule of expected cash collections from sales, by month and in total, for the second quarter.
![826_2.png](https://secure.tutorsglobe.com/CMSImages/826_2.png)
2. Assume that the company will prepare a budgeted balance sheet as of June 30. Compute the accounts receivable as of that date.
![2221_3.png](https://secure.tutorsglobe.com/CMSImages/2221_3.png)