The ABC Company\'s Budgeted sales and directed materials purchases are as follow
ID: 2459577 • Letter: T
Question
The ABC Company's Budgeted sales and directed materials purchases are as follows.
The company 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. The company 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.
(a) Prepare a schedule of expexted collections from customers for june.
(b) Prepare a schedule of expected payments for direct materials for june.
Budgeted Sales Budgeted Direct Material Purchases April $300,000 $60,000 May 330,000 70,000 June 350,000 80,000Explanation / Answer
schedule of expexted collections from customers for june. Particulars April May June Budgeted Sales 300,000.00 330,000.00 350,000.00 Cash Sales @40% (a) 120,000.00 132,000.00 140,000.00 Credit Sales = Sale- cash sales 180,000.00 198,000.00 210,000.00 Collection of credit sale in same month @10% b 18,000.00 19,800.00 21,000.00 Collection of credit sale in next month @50% c 90,000.00 99,000.00 Collection of credit sale in second month @36% d 64,800.00 Total Collections a+b+c+d 138,000.00 241,800.00 324,800.00 schedule of expected payments for direct materials for june Particulars April May June Budgeted Direct Material Purchases 60,000.00 70,000.00 80,000.00 Cash Purchases @ 50% (a) 30,000.00 35,000.00 40,000.00 Credit Purchases @50% 30,000.00 35,000.00 40,000.00 Payment in same month @40% (b) 12,000.00 14,000.00 16,000.00 Payment in next month @60% (c) 18,000.00 21,000.00 Total Payments a+b+c 42,000.00 67,000.00 77,000.00
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