Can you help me with this question please? M7 Inc. budgeted sales and direct mat

Question

Can you help me with this question please?

M7 Inc. budgeted sales and direct materials purchases are as follows:

March Budgeted sales $175,000 Budgeted Direct Material Purchases $23,000

April Budgeted sales $200,000 Budgeted Direct Material Purchases $34,000

May Budgeted sales $275,000 Budgeted Direct Material Purchases $44,000

M7 Inc. sales are 25% cash and 75% credit. It collects credit sales 25% in the month of sale, 35% in the month following sale, and 35% in the second month following sale; 5% are uncollectible. M7 Inc. purchases are 40% cash and 60% on account. It pays purchases on account 55% in the month of purchase, and 45% in the month following purchase.

Required:

Prepare a schedule of expected collections from customers for May.

Prepare a schedule of expected payment for direct materials for May.

Explanation / Answer

1. Schedule of expected collections from customers for May:-

2. Schedule of expected payment for direct materials for May:-

Please Rate or comment if you have any doubt regarding this solution.

Particulars Amount Total sales of May 275,000 Cash sales @25% (A) 68,750 35 % of April month credit sales (200,000 * 75%) * 35% (B) 52,500 35 % of March month credit sales (175,000 * 75%) * 35% (C) 45,937.50 Expected collections from customers for May (A+B+C) 167,187.50

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