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    Expected Cash Collections

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    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) $567,000 $789,000 $461,000 $1,817,000

    From past experience, the company has learned that 25% of a month's sales are collected in the month of sale, another 70% 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. May sales totaled $429,000, and June sales totaled $528,000.

    Requirement 1:
    Prepare a schedule of expected cash collections from sales, by month and in total for the third quarter.
    July August September Total
    May sales $ $ $ $
    June sales
    July sales
    August sales
    September sales
    Total cash collections $ $ $ $

    Requirement 2:
    Assume that the company will prepare a budgeted balance sheet as of September 30. Compute the accounts receivable as of that date.

    Accounts Receivable = $

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    https://brainmass.com/economics/personal-finance-savings/expected-cash-collections-234686

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    The solution explains how to prepare a schedule of expected cash collections

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