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:
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July
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August
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September
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Total
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Budgeted sales (all on account)
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$ 553,000
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$ 808,000
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$ 496,000
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$ 1,857,000
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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 $533,000.
2. Required information:
1.Prepare a schedule of expected cash collections from sales, by month and in total, for the third quarter. (Do not round intermediate calculations. Leave no cells blank - be certain to enter "0" wherever required.)
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Schedule of Expected Cash Collections
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July
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August
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September
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Total
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May sales
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$
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$
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$
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$
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June sales
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|
|
|
|
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July sales
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|
|
|
|
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August sales
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|
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September sales
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|
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Total cash collections
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$
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$
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$
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$
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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.)
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Total accounts receivable
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$
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