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xercise 21-17 Nieto Company’s budgeted sales and direct materials purchases are

ID: 2526591 • Letter: X

Question

xercise 21-17

Nieto Company’s budgeted sales and direct materials purchases are as follows.

Budgeted Sales

Budgeted D.M. Purchases

Nieto’s sales are 30% cash and 70% 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. Nieto’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.

(a)

Prepare a schedule of expected collections from customers for March. (Round answers to 0 decimal places, e.g. 2,500.)

NIETO COMPANY
Expected Collections from Customers

March


(b)

Prepare a schedule of expected payments for direct materials for March. (Round answers to 0 decimal places, e.g. 2,500.)

NIETO COMPANY
Expected Payments for Direct Materials

March

LINK TO TEXT

Budgeted Sales

Budgeted D.M. Purchases

January $204,700 $38,600 February 301,200 45,000 March 270,900 46,400

Explanation / Answer

a March March cash sales 81270 =270900*30% Collection of March credit sales 18963 =270900*70%*10% Collection of February credit sales 105420 =301200*70%*50% Collection of January credit sales 51584 =204700*70%*36%    Total collections 257237 b March March cash purchases 23200 =46400*50% Payment of March credit purchases 9280 =46400*50%*40% Payment of February credit purchases 13500 =45000*50%*60%    Total payments 45980