NIU Company\'s budgeted sales and direct materials purchases are as follows. Bud
ID: 2390421 • Letter: N
Question
NIU Company's budgeted sales and direct materials purchases are as follows.Budgeted Sales Budgeted D.M. Purchases
January $220,000 $33,000
February 242,000 38,500
March 297,000 45,100
NIU's sales are 40% cash and 60% 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. NIU'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.
NIU COMPANY
Expected Collections from Customers
March
March cash sales $
Collection of March credit sales
Collection of February credit sales
Collection of January credit sales
Total collections $
Prepare a schedule of expected payments for direct materials for March.
NIU COMPANY
Expected Payments for Direct Materials
March
March cash purchases $
Payment of March credit purchases
Payment of February credit purchases
Total payments $
Explanation / Answer
NIU COMPANY Expected Collections from Customers March March cash sales $118,800 (297,000*.40) Collection of March credit sales $17,820 (297,000*.6*.1) Collection of February credit sales $72,600 (242,000*.6*.5) Collection of January credit sales $47,520 (220,000*.6*.36) Total collections $256,740 Prepare a schedule of expected payments for direct materials for March. NIU COMPANY Expected Payments for Direct Materials March March cash purchases $22,550 (45,100*.5) Payment of March credit purchases $9,020 (45,100*.5*.4) Payment of February credit purchases $11,550 (38,500*.5*.6) Total payments $43,120
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