Nieto Company's budgeted sales and direct materials purchases are as follows. Budgeted Sales Budgeted D. M. Purchases January $ 237,400 $ 36,500 February 251,400 39,800 March 336,600 41,500 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. (a) Prepare a schedule of expected collections from customers for March

Question

Shiloh Bender

Business

24 September, 16:12

Nieto Company's budgeted sales and direct materials purchases are as follows. Budgeted Sales Budgeted D. M. Purchases January $ 237,400 $ 36,500 February 251,400 39,800 March 336,600 41,500 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. (a) Prepare a schedule of expected collections from customers for March

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Victor · Answer 1

Instructions are listed below.

Explanation:

Giving the following information:

Budgeted Sales:

January $ 237,400

February 251,400

March 336,600

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.

Cash collection March:

Cash sales = 336,600*0.3 = 100,980

Credit Sales March = (336,600*0.7*0.1) = 23,562

From February = (251,400*0.7*0.5) = 87,990

From January = (237,400*0.7*0.36) = 59,824.8

Total = 272,356.8