Silver Company makes a product that is very popular as aMother’s Day gift. Thus, peak sales occur in May of each year, asshown in the company’s sales budget for the second quarter givenbelow:
| April | May | June | Total |
| Budgeted sales (all on account) | $300,000 | $500,000 | $200,000 | $1,000,000 |
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From past experience, the company has learned that 20% of amonth’s sales are collected in the month of sale, another 70% arecollected in the month following sale, and the remaining 10% arecollected in the second month following sale. Bad debts arenegligible and can be ignored. February sales totaled $230,000, andMarch sales totaled $260,000.
Required:
1. Prepare a schedule of expected cash collections from sales,by month and in total, for the second quarter.
2. What is the accounts receivable balance on June 30th?
