Question

I need answers for 5,6,7 only

Badlands, Inc, manufactures a household fan that sells for $20 per unit. All sales are on account, with 40 percent of sales collected in the month of sale and 60 percent collected in the following month. The data that follow were extracted from the company's accounting records. • Badlands maintains a minimum cash balance of $32,000. Total payments in January 20x1are budgeted at $185.000 • A schedule of cash collections for January and February of 20xt revealed the following receipts for the period: eBook References Prom December 31 accounts rece Prom January sales From February sales Cash receipts January February $ 111,000 78,000 $110.000 74.600 • March 20x1 sales are expected to total 10,500 units. • Finished-goods inventories are maintained at 20 percent of the following month's sales The December 31, 20x0, balance sheet revealed the following selected figures: cash, $22,700; accounts receivable, $111,000; and finished goods, $22.650. Required: 1. Determine the number of units that Badlands sold in December 20x0. 2. Compute the sales revenue for March 20x1.

Answer 1

5	December 31 finished-goods inventory	1,960	Units
6	Finished goods to be manufactured in January	9,725	Units
7	Financing required in January	$28,000

Calculations:

For 5,

January 20x1 sales in units = ($78,000+$118,000) ÷ $20 = $196,000/$20 = 9,800 units

Dec 31, 20x0 finished-goods inventory = January 20x1 sales in units x 20%

= 9,800 x 20%

= 1,960 Units

For 6,

Dec 31,20x0 ($111,000/60%)÷ $20	9,250
January sales ($196,000/$20)	9,800
January 31, 20x1 (186,500/20)	-9,325
Number of units of finished goods to be manufactured in January 20x1	9,725

For 7,

Total Collections in January 20x1 (111,000+78,000)	$189,000
Total Payments in January 20x1	($185,000)
Total preliminary cash available	$4,000
Minimum cash to be maintained	($32,000)
Financing required in January	$28,000