Badlands, Inc. manufactures a household fan that sells for $20 per unit. All sal
ID: 2401836 • Letter: B
Question
Badlands, Inc. manufactures a household fan that sells for $20 per unit. All sales are on account, with 35 percent of sales collected in the month of sale and 65 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 $28,000. Total payments in January 20x1 are budgeted at $195,000.
A schedule of cash collections for January and February of 20x1 revealed the following receipts for the period:
Cash Receipts JanuaryFebruaryFrom December 31 accounts receivable$117,000 From January sales 80,000 $121,000 From February sales 66,500
March 20x1 sales are expected to total 10,000 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, $22,900; accounts receivable, $117,000; and finished goods, $22,950.
Required:
Determine the number of units that Badlands sold in December 20x0.
Compute the sales revenue for March 20x1.
Compute the total sales revenue to be reported on Badlands' budgeted income statement for the first quarter of 20x1.
Determine the accounts receivable balance to be reported on the March 31, 20x1, budgeted balance sheet.
Calculate the number of units in the December 31, 20x0, finished-goods inventory.
Calculate the number of units of finished goods to be manufactured in January 20x1.
1. December sales 2. March sales revenue 3. First quarter sales revenue 4. March 31 accounts receivable balance 5. December 31 finished-goods inventory units units 6. Finished goods to be manufactured in January units 7. Financing required in JanuaryExplanation / Answer
1.
December Sales 9000 units March Sales Revenue $ 200,000 1st Quarter Sales Revenue $ 592,000 March 31 AR Balance $ 130,000 Dec 31 FG Inventory $ 2010 FG to be manufactured in Jan 9940 unitsRelated Questions
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