NIU Company\'s budgeted sales and direct materials purchases are as follows. Bud
ID: 2347505 • Letter: N
Question
NIU Company's budgeted sales and direct materials purchases are as follows.Budgeted Sales Budgeted D.M. Purchases
January $200,000 $30,000
February 220,000 35,000
March 270,000 41,000
NIU's sales are 40% cash and 60% credit. Credit sales are collected 10% in the month of sale, 50% in the month following sale, and 36% in the second month following sale; 4% are uncollectible. NIU's purchases are 50% cash and 50% on account. Purchases on account are paid 40% in the month of purchase, and 60% in the month following purchase.
Prepare a schedule of expected collections from customers for March.
Explanation / Answer
A. Sales are 40% cash and 60% credit.credit collections are 10% themonth of sales, 50% following and 36% second month.
January February March
12,000 60,000 43,200
13,200 66,000
16,200
Cashsales 80,000 88,000 108,000
Total expectedcollections 92,000 161,200 233,400
B. Schedule of expected payments for purchases
January February March
6,000 9,000 10,500
7,000 8,200
Cashpurchases 15,000 17,500 20,500
Total expectedpayments 21,000 33,500 39,200
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.