ExercisesExercise 1 (Schedule of Expectęd Cash Collections)Peak sales for Mideast Products, Inc., occur in August. The company's salesbudget for the third quarter showing these peak sales is given below:JulyP600,000SeptemberP500,000TotalAugustP900,000Budgeted salesP2,000,000From past experience, the company has learned that 20% of a month's salesare collected in the month of sale, that another 70% is collected in the monthfollowing sale, and that the remaining 10% is collected in the second monthfollowing sale. Bad debts are negligible and can be ignored. May sales totaledP430,000 and June sales totaled P540,000.Required:1. Prepare a schedule of expected cash collections from sales, by month andin total, for the third quarter.2. Assume that the company will prepare a budgeted statement of financialposition as of September 30. Compute the accounts receivable as of thatdate.

Given: May June July Aug Sep Sales $430,000 $540,000 $600,000 $900,000 $500,000 Expected…

1. Prepare a schedule of expected cash collections from sales, by month and in total, for the third quarter. 2. Assume that the company will prepare a budgeted statement of financial position as of September 30. Compute the accounts receivable as of that date.

1. Prepare a schedule of expected cash collections from sales, by month and in total, for the third quarter. 2. Assume that the company will prepare a budgeted statement of financial position as of September 30. Compute the accounts receivable as of that date.

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter8: Budgeting

Section: Chapter Questions

Problem 18E

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