Peak sales for Midwest Products
Peak sales for Midwest Products, a wholesale distributor of leaf rakes, occur in August. The company's sales budget for the third quarter showing these peak sales is given below:
July
August
September
Total
Budgeted sales (all on account)
$
594,000
$
822,000
$
452,000
$
1,868,000
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From past experience, the company has learned that 20% of a month's sales are collected in the month of sale, another 70% 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 $434,000, and June sales totaled $524,000.
Requirement 1:
Prepare a schedule of expected cash collections from sales, by month and in total, for the third quarter. (Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.)
July
August
September
Total
May sales
$
$
$
$
June sales
July sales
August sales
September sales
Total cash collections
$
$
$
$
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Requirement 2:
Assume that the company will prepare a budgeted balance sheet as of September 30. Compute the accounts receivable as of that date. (Omit the "$" sign in your response.)
Accounts Receivable
$
Hint 1
