50.1K

Verified Solution

Link Copied!

Silver Company makes a product that is very popular as a Mother's Day gift. Thus, peak sales occur in May of each year. These peak sales are shown in the following sales budget for the second quarter:

AprilMayJuneTotal

Budgeted sales$400,000$600,000$300,000$1,300,000

From past experience, the company has learned that 25% of a month's sales are collected in the month of sale, another 65% are collected in the month following the sale, and the remaining 10% are collected in the second month following the sale. Bad debts are negligible and can be ignored. February sales totalled $380,000, and March sales totalled $360,000.

1. need a schedule of expected cash collections from sales, by month and in total, for the second quarter.

2.Assume that the company will need a budgeted balance sheet as of June 30. Compute the accounts receivable as of that date.

Q2-

Down Under Products, Ltd., of Australia, has budgeted sales of its popular boomerang for the next four months as follows:

Sales in UnitsApril50,000May75,000June90,000July80,000

The company is now in the process of preparing a production budget for the second quarter. Past experience has shown that end-of-month inventory levels must equal 10% of the following month's sales. The inventory at the end of March was 5,000 units. (Australia's currency is the Australian dollar.)

need a production budget for the second quarter; in your budget, show the number of units to be produced each month and for the quarter in total.

Answer & Explanation Solved by verified expert

See Answer