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To solve this problem, we need to create a schedule of expected cash collections based on the sales data and the collection percentages provided for Silver Company.

### Problem Breakdown:

1. **Sales per Month**:
   - April: $450,000
   - May: $650,000
   - June: $250,000
   - February Sales: $380,000
   - March Sales: $410,000

2. **Collection Percentages**:
   - 25% of each month’s sales are collected in the month of the sale.
   - 60% of each month’s sales are collected in the month following the sale.
   - 15% of each month’s sales are collected in the second month following the sale.

### Steps to Solve the Problem:

#### Step 1: Calculate Expected Cash Collections for Each Month

Let’s break down the collections month-by-month based on when they are received.

1. **April**:
   - 25% of April sales collected in April: $ 450,000 \times 0.25 = 112,500 $
   - 60% of April sales collected in May: $ 450,000 \times 0.60 = 270,000 $
   - 15% of April sales collected in June: $ 450,000 \times 0.15 = 67,500 $

2. **May**:
   - 25% of May sales collected in May: $ 650,000 \times 0.25 = 162,500 $
   - 60% of May sales collected in June: $ 650,000 \times 0.60 = 390,000 $
   - 15% of May sales collected in July (which is beyond the given period)

3. **June**:
   - 25% of June sales collected in June: $ 250,000 \times 0.25 = 62,500 $
   - 60% of June sales collected in July (which is beyond the given period)
   - 15% of June sales collected in August (also beyond the period)

4. **February and March Sales**:
   - February: $380,000
     - 60% collected in April: $ 380,000 \times 0.60 = 228,000 $
     - 15% collected in May: $ 380,000 \times 0.15 = 57,000 $
   - March: $410,000
     - 60% collected in May: $ 410,000 \times 0.60 = 246,000 $
     - 15% collected in June: $ 410,000 \times 0.15 = 61,500 $

#### Step 2: Fill in the Schedule Based on Calculations

| Collection Source      | April   | May     | June    | Total     |
|------------------------|---------|---------|---------|-----------|
| **February Sales**     | 228,000 | 57,000  | -       | 285,000   |
| **March Sales**        | -       | 246,000 | 61,500  | 307,500   |
| **April Sales**        | 112,500 | 270,000 | 67,500  | 450,000   |
| **May Sales**          | -       | 162,500 | 390,000 | 552,500   |
| **June Sales**         | -       | -       | 62,500  | 62,500    |
| **Total Cash Collections** | 340,500 | 735,500 | 581,500 | 1,657,500 |

#### Step 3: Calculate Accounts Receivable on June 30th

Accounts receivable on June 30th will consist of:
   - 15% of May sales (to be collected in July): $ 650,000 \times 0.15 = 97,500 $
   - 60% of June sales (to be collected in July): $ 250,000 \times 0.60 = 150,000 $
   - 15% of June sales (to be collected in August): $ 250,000 \times 0.15 = 37,500 $

So, the **accounts receivable balance on June 30th** is:
\[
97,500 + 150,000 + 37,500 = 285,000
\]

### Final Answers

1. **Total Cash Collections for the Second Quarter**: $1,657,500
2. **Accounts Receivable Balance on June 30th**: $285,000

Would you like more details on any specific calculation steps?

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Here are some questions to further explore this topic:

1. What adjustments would be needed if bad debts were considered?
2. How would an increase in the percentage of cash collected in the month of sale affect the accounts receivable?
3. What would the accounts receivable be if July sales were projected to increase?
4. How does extending the collection period impact cash flow?
5. Can the cash collections schedule help in predicting cash flow issues?

**Tip:** Breaking down sales collections by month can greatly help with cash flow planning and identifying potential gaps in cash availability.

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. From past experience, the company has learned that 25% of a month's sales are collected in the month of sale, another 60% are collected in the month following sale, and the remaining 15% are collected in the second month following sale. Bad debts are negligible and can be ignored. February sales totaled $380,000, and March sales totaled $410,000. Required: 1. Prepare a schedule of expected cash collections from sales, by month and in total, for the second quarter. 2. What is the accounts receivable balance on June 30th?

Learn how to prepare a schedule of expected cash collections from sales for Silver Company’s second quarter and calculate the accounts receivable balance as of June 30th. This involves budgeting techniques and percentage calculations based on sales data.

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