Midwest Products is a wholesale distributor of leaf rakes. Thus, peak sales occur in August of each year as shown in the companys sales budget for the third quarter, given below:
July
August
September
Total
Budgeted sales (all on account)
$ 600,000
$ 900,000
$ 500,000
$ 2,000,000
From past experience, the company has learned that 20% of a months 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 $430,000, and June sales totaled $540,000.
Required:
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. Omit the $ sign in your response.)
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. Omit the $ sign in your response.)
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