Bright Minds Toy Company prepared the following sales budget for the second quarter. Projected sales for each of the first three months of operations are as follows: Sales Budget Cash Sales Sales on Account Bright Minds expects to collect 70% of the sales on account in the month of sale, 20% in the month following the sale, and the remainder in the second month following the sale. What is the amount of sales Multiple Choice April May June 50,000 51,000 75,000 390,000 448,000 425,000 440,000 499,000 500,000 $1,439,000 venue that the company will report on the second quarter pro forma income statement?

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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**Bright Minds Toy Company Sales Budget Analysis**

Bright Minds Toy Company has prepared the following sales budget for the second quarter. Projected sales for each of the first three months of operations are outlined below:

| Sales Budget     | April  | May    | June   |
|------------------|--------|--------|--------|
| Cash Sales       | 50,000 | 51,000 | 75,000 |
| Sales on Account | 390,000| 448,000| 425,000|
| **Total Sales**  | 440,000| 499,000| 500,000|

**Collection Strategy**  
Bright Minds anticipates collecting 70% of the sales on account during the month of sale, 20% in the month following the sale, and the remaining 10% in the second month following the sale.

**Question for Consideration**  
What is the amount of sales revenue that the company will report on the second-quarter pro forma income statement?

**Options**  
- $1,439,000

This exercise will aid in understanding sales budgeting, cash flow timing, and pro forma income statement preparation.
Transcribed Image Text:**Bright Minds Toy Company Sales Budget Analysis** Bright Minds Toy Company has prepared the following sales budget for the second quarter. Projected sales for each of the first three months of operations are outlined below: | Sales Budget | April | May | June | |------------------|--------|--------|--------| | Cash Sales | 50,000 | 51,000 | 75,000 | | Sales on Account | 390,000| 448,000| 425,000| | **Total Sales** | 440,000| 499,000| 500,000| **Collection Strategy** Bright Minds anticipates collecting 70% of the sales on account during the month of sale, 20% in the month following the sale, and the remaining 10% in the second month following the sale. **Question for Consideration** What is the amount of sales revenue that the company will report on the second-quarter pro forma income statement? **Options** - $1,439,000 This exercise will aid in understanding sales budgeting, cash flow timing, and pro forma income statement preparation.
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