Exercise 22-17 Nieto Company's budgeted sales and direct materials purchases are as follows. Budgeted Sales Budgeted D. M. Purchases January $274,000 $37,700 February 233,300 40,600 March 296,500 52,000 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.

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Lauren Robles

Business

16 June, 12:13

Exercise 22-17 Nieto Company's budgeted sales and direct materials purchases are as follows. Budgeted Sales Budgeted D. M. Purchases January $274,000 $37,700 February 233,300 40,600 March 296,500 52,000 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.

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Makenzie Todd · Answer 1

The preparation of the schedule of expected collections from customers for March is presented below:

Nieto Company's

Expected Collections from customers

Particulars Calculations Amount ($)

March cash sales (30% * $296,500) $88,950

Collection of March credit sales [ (70% * $296,500) * 10%] $20,755

Collection of February credit sales [ (70% * $233,300) * 50%] $81,655

Collection of January credit sales [ (70% * $274,000) * 36%] $69,048

Total collections $260,408