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Silver Company makes a product with peak sales in May of each year. Its sales...

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Accounting

Silver Company makes a product with peak sales in May of each year. Its sales budget for the second quarter is given below:

April May June Total
Budgeted sales (all on account) $ 320,000 $ 520,000 $ 180,000 $ 1,020,000

The company estimates 30% of a months sales are collected in the month of sale, another 65% 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 $250,000, and March sales totaled $280,000.

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?
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