Silver Company makes a product with peak sales in May of each year. Its sales budget for the second quarter is given below:

 	April	May	June	Total
Budgeted sales (all on account)	$ 370,000	$ 570,000	$ 180,000	$ 1,120,000
The company estimates 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 $300,000, and March sales totaled $330,000.

Required:
Prepare a schedule of expected cash collections from sales, by month and in total, for the second quarter.
What is the accounts receivable balance on June 30th?

To prepare a schedule of expected cash collections from sales for Silver Company, we need to calculate how much cash will be collected each month based on the sales figures for February, March, and the second quarter. Collections are broken down as follows:

- **25% of a month’s sales are collected in the same month.**
- **65% of a month’s sales are collected in the following month.**
- **10% of a month’s sales are collected two months later.**

### Step 1: Breakdown of Sales and Collections

#### February Sales ($300,000)
- 25% collected in February: $300,000 × 0.25 = $75,000
- 65% collected in March: $300,000 × 0.65 = $195,000
- 10% collected in April: $300,000 × 0.10 = $30,000

#### March Sales ($330,000)
- 25% collected in March: $330,000 × 0.25 = $82,500
- 65% collected in April: $330,000 × 0.65 = $214,500
- 10% collected in May: $330,000 × 0.10 = $33,000

#### April Sales ($370,000)
- 25% collected in April: $370,000 × 0.25 = $92,500
- 65% collected in May: $370,000 × 0.65 = $240,500
- 10% collected in June: $370,000 × 0.10 = $37,000

#### May Sales ($570,000)
- 25% collected in May: $570,000 × 0.25 = $142,500
- 65% collected in June: $570,000 × 0.65 = $370,500
- 10% collected in July: $570,000 × 0.10 = $57,000

#### June Sales ($180,000)
- 25% collected in June: $180,000 × 0.25 = $45,000
- 65% collected in July: $180,000 × 0.65 = $117,000
- 10% collected in August: $180,000 × 0.10 = $18,000

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### Step 2: Schedule of Expected Cash Collections

Now let's sum up the collections by month.

- **April:**
  - From February sales: $30,000
  - From March sales: $214,500
  - From April sales: $92,500
  - **Total for April: $30,000 + $214,500 + $92,500 = $337,000**

- **May:**
  - From March sales: $33,000
  - From April sales: $240,500
  - From May sales: $142,500
  - **Total for May: $33,000 + $240,500 + $142,500 = $416,000**

- **June:**
  - From April sales: $37,000
  - From May sales: $370,500
  - From June sales: $45,000
  - **Total for June: $37,000 + $370,500 + $45,000 = $452,500**

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### Step 3: Total Collections for the Second Quarter
- **Total for April**: $337,000
- **Total for May**: $416,000
- **Total for June**: $452,500
- **Total for the Quarter**: $337,000 + $416,000 + $452,500 = $1,205,500

---

### Step 4: Accounts Receivable Balance on June 30th

The accounts receivable balance at the end of June will include:

- 10% of May sales collected in July: $570,000 × 0.10 = $57,000
- 65% of June sales collected in July: $180,000 × 0.65 = $117,000
- 10% of June sales collected in August: $180,000 × 0.10 = $18,000

Thus, the accounts receivable on June 30th is:
\[
\text{A/R on June 30th} = 57,000 + 117,000 + 18,000 = 192,000
\]

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### Final Answers:
- **Expected cash collections for the second quarter**: $1,205,500
- **Accounts receivable on June 30th**: $192,000

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Would you like further details on any of the steps?

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Here are some related questions you might consider:
1. How would the accounts receivable change if a portion of sales became bad debts?
2. How would changes in collection percentages affect cash flow?
3. What would be the cash collection for a different sales scenario, like a 10% increase in May sales?
4. How can delayed collections impact a company's liquidity?
5. What financial ratios could be affected by shifts in accounts receivable?

**Tip**: Regularly reviewing collection patterns can help optimize cash flow projections!

Silver Company makes a product with peak sales in May of each year. Its sales budget for the second quarter is given below: 

April May June Total 
Budgeted sales (all on account) $ 370,000 $ 570,000 $ 180,000 $ 1,120,000 
The company estimates 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 $300,000, and March sales totaled $330,000.

Required:
Prepare a schedule of expected cash collections from sales, by month and in total, for the second quarter. What is the accounts receivable balance on June 30th?

Prepare a detailed schedule of expected cash collections from sales for Silver Company during Q2, based on a 25-65-10 percentage collection pattern. Analyze the total cash flow for April, May, and June, and calculate the accounts receivable balance on June 30th. This problem involves cash flow management and percentage calculations, suitable for finance students.

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