III. EXERCISES Exercise 1 (Schedule of expected Cash Collection) Peak sales for Mideast Products, Inc., occur in August. The company's sales budget for the third quarter showing these peak sales is...

Extracted text: III. EXERCISES Exercise 1 (Schedule of expected Cash Collection) Peak sales for Mideast Products, Inc., occur in August. The company's sales budget for the third quarter showing these peak sales is given below: July August September Total Budgeted sales P600,000 P900,000 P2,000,000 P2,000.000 From past experience, the company has learned that 20% of a month's sales are collected in the month of sale, that another 70% is collected in the month following sale, and that the remaining 10% is collected in the second month following sale. Bad debts are negligible and can be ignored. May sales totaled P430,000 and June sales totaled P540,000. Required: 1. Prepare a schedule of expected cash collections from sales, bymonth and in total, for the thirdquarter. 2. Assume that the company will prepare a budgeted statement of financial position as of September 30. Compute the accounts receivable as ofthat date.