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: $\begin{array}{lccc}
\text { Sales Budget } & \text { April } & \text { May } & \text { June } \
\text { Cash sales } & 30,000 & 43,000 & 55,000 \
\text { Sales on account } & \underline{ 370,000 }& \underline{432,000 }& \underline{ 405,000}\
& \underline{400,000}& \underline{475,000}& \underline{460,000}
\end{array}$

- 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 revenue that the company will report on the second quarter pro forma income statement?

Question

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: $\begin{array}{lccc}
\text { Sales Budget } & \text { April } & \text { May } & \text { June } \
\text { Cash sales } & 30,000 & 43,000 & 55,000 \
\text { Sales on account } & \underline{ 370,000 }&  \underline{432,000 }& \underline{ 405,000}\
& \underline{400,000}& \underline{475,000}& \underline{460,000}
\end{array}$

- 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 revenue that the company will report on the second quarter pro forma income statement?

Quizplus · Accepted Answer

The sales revenue for the second quarter includes all cash sales and sales on account for April, May, and June. Adding these gives: $400,000 (April) + $475,000 (May) + $460,000 (June) = $1,335,000.

Bright Minds Toy Company Prepared the Following Sales Budget for the Second