Prepare a schedule of expected cash collections from sales, by month and in total, for the second quarter.

Steps to Solve

1. Identify Budgeted Sales for Each Month

   • From the problem, the budgeted sales for each month in the second quarter are:
     • April: $390,000
     • May: $590,000
     • June: $230,000

2. Calculate Cash Collections for Each Month

   • Collections are based on when the sales happen:
     • April Sales ($390,000):
       • 25% collected in April: $$ 0.25 \times 390,000 = 97,500 $$
       • 60% collected in May: $$ 0.60 \times 390,000 = 234,000 $$
     • May Sales ($590,000):
       • 25% collected in May: $$ 0.25 \times 590,000 = 147,500 $$
       • 60% collected in June: $$ 0.60 \times 590,000 = 354,000 $$
     • June Sales ($230,000):
       • 25% collected in June: $$ 0.25 \times 230,000 = 57,500 $$
       • 60% will be collected in July (not needed for this quarter)

3. Summarize the Cash Collections for Each Month

   • Total collections for each month will be calculated as follows:
     • April:
       • Total cash collected: $97,500
     • May:
       • Total cash collected: $$ 234,000 + 147,500 = 381,500 $$
     • June:
       • Total cash collected: $$ 354,000 + 57,500 = 411,500 $$

4. Compile the Expected Cash Collections for the Quarter

   • Add cash collections over the three months: $$ \text{Total for Quarter} = 97,500 + 381,500 + 411,500 = 890,500 $$