NIU Company\'s budgeted sales and direct materials purchase areas follows. Month

Question

NIU Company's budgeted sales and direct materials purchase areas follows. Month                        BudgetedSales                        BudgetedD.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 arecollected 10% in the month of sale, 50% in the month following thesale and 36% in the second month following the sale; 4% areuncollectible. NIU's purchases are 50% cash and 50% on account.Purchase on account are paid 40% in the month of purchase and 60%in the month following purchase. Instructions: a. prepare a schedule of expected collections from customersfor match b. prepare a schedle of expected payments for direct materialsfor match NIU Company's budgeted sales and direct materials purchase areas follows. Month                        BudgetedSales                        BudgetedD.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 arecollected 10% in the month of sale, 50% in the month following thesale and 36% in the second month following the sale; 4% areuncollectible. NIU's purchases are 50% cash and 50% on account.Purchase on account are paid 40% in the month of purchase and 60%in the month following purchase. Instructions: a. prepare a schedule of expected collections from customersfor match b. prepare a schedle of expected payments for direct materialsfor match

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

• Browse (All)
• Browse N
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.