Nieto Company’s budgeted sales and direct materials purchases are as follows.
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.
prepare a schedule of expected collections from customers for March. (Round answers to 0 decimal places, e.g. 2,500.)
Prepare a schedule of expected payments for direct materials for
March. (Round answers to 0 decimal places, e.g.
2,500.)
NIETO COMPANY | |
Expected Collections from Customers | |
March | |
March cash sales | 85440 |
Collection of March credit sales | 19936 |
Collection of February credit sales | 79555 |
Collection of January credit sales | 59774 |
Total collections | 244705 |
NIETO COMPANY | |
Expected Payments for Direct Materials | |
March | |
March cash purchases | 21450 |
Payment of March credit purchases | 8580 |
Payment of February credit purchases | 12930 |
Total Payments | 42960 |
Above figures have been calculated in the following manner:
NIETO COMPANY | |
Expected Collections from Customers | |
March | |
March cash sales | =284800*0.3 |
Collection of March credit sales | =284800*0.7*0.1 |
Collection of February credit sales | =227300*0.7*0.5 |
Collection of January credit sales | =237200*0.7*0.36 |
Total collections | 244705 |
NIETO COMPANY | |
Expected Payments for Direct Materials | |
March | |
March cash purchases | =42900*0.5 |
Payment of March credit purchases | =42900*0.5*0.4 |
Payment of February credit purchases | =43100*0.5*0.6 |
Total Payments | 42960 |
Nieto Company’s budgeted sales and direct materials purchases are as follows. Nieto’s sales are 30% cash...
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