Comprehensive budgeting problem (Learning Objectives 2 & 3) Martin Manufacturing

Question

Comprehensive budgeting problem (Learning Objectives 2 & 3) Martin Manufacturing is preparing its master budget for the first quarter of the upcoming year. The following data pertain to Martin Manufacturing's operations: P9-57A Current Assets as of December 31 (prior year): $ 4,500 $ 47,000 $ 15,700 $120,000 $42,400 $124,000 Retained earnings$ 23,100 Cash esesese Accounts receivable, net..uuuu....» Property, plant, and equipment, net. a. Actual sales in December were $70,000. Selling price per unit is projected to remain stable at $10 per unit throughout the budget period. Sales for the first five months of the upcoming year are budgeted to be as follows: $ 80,000 $92,000 $99,000 $97,000 $ 85,000 44684 8086 64844 848 64844844894844484444444844944484484 68444E484 Februar March Ma b. Sales are 30% cash and 70% credit. All credit sales are collected in the month follow- ing the sale.

Explanation / Answer

Cash Collection Budget For the Quarter Ended March 31 Month January February March Quarter Cash Sales (30% x $80,000) = $24,000 (30% x $92,000) = $27,600 (30% x $99,000) = $29,700 $81,300 Credit Sales (70% x $70,000) = $49,000 (70% x $80,000) = $56,000 (70% x $92,000) = $64,400 $169,400 Total Cash Collections $73,000 $83,600 $94,100 $250,700

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