Question

Zachary Company, which expects to start operations on January 1, 2018, will sell digital cameras in shopping malls. Zachary has budgeted sales as indicated in the following table. The company expects a 15 percent increase in sales per month for February and March. The ratio of cash sales to sales on account will remain stable from January through March. Required a. Complete the sales budget by filling in the missing amounts. b. Determine the amount of sales revenue Zachary will report on its first quarter pro forma income statement. Complete this question by entering your answers in the tabs below. Required A Required B Complete the sales budget by filling in the missing amounts. (Round intermediate calculations and final answers to 2 decimal places.) February March Sales Cash sales January $ 38,000 102,000 $ 140,000 Sales on account Total budgeted sales Required >

Answer 1

A)

Sales	January	February	March
Cash sales	38,000	43,700	50,255
Sales on account	102,000	117,300	134,895
Total budgeted sales	140,000	161,000	185,150

Budgeted sales in February = Budgeted sales in January x 115%

= 140,000 x 115%

= $161,000

Budgeted sales in March = Budgeted sales in February x 115%

= 161,000 x 115%

= $185,150

B)

Sales revenue to be reported in the first quarter pro forma income statement = Budgeted sales in January + Budgeted sales in February + Budgeted sales in March

= 140,000 + 161,000 + 185,150

= $486,150

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