I need help with a Accounting question. All explanations and answers will be used to help me learn.
**See document for all questions
Silver Company makes a product that is very popular as a Mother’s Day gift. Thus, peak sales occur in May of each year, as shown in the company’s sales budget for the second quarter given below:
|
April |
May |
June |
Total |
|
|
Budgeted sales (all on account) |
$470,000 |
$670,000 |
$230,000 |
$1,370,000 |
|
|
||||
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 sale, and the remaining 10% are collected in the second month following sale. Bad debts are negligible and can be ignored. February sales totaled $400,000, and March sales totaled $430,000.
