xercise 21-17 Nieto Company’s budgeted sales and direct materials purchases are
ID: 2526591 • Letter: X
Question
xercise 21-17
Nieto Company’s budgeted sales and direct materials purchases are as follows.
Budgeted Sales
Budgeted D.M. Purchases
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. (Round answers to 0 decimal places, e.g. 2,500.)
NIETO COMPANY
Expected Collections from Customers
March
(b)
Prepare a schedule of expected payments for direct materials for March. (Round answers to 0 decimal places, e.g. 2,500.)
NIETO COMPANY
Expected Payments for Direct Materials
March
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Budgeted Sales
Budgeted D.M. Purchases
January $204,700 $38,600 February 301,200 45,000 March 270,900 46,400Explanation / Answer
a March March cash sales 81270 =270900*30% Collection of March credit sales 18963 =270900*70%*10% Collection of February credit sales 105420 =301200*70%*50% Collection of January credit sales 51584 =204700*70%*36% Total collections 257237 b March March cash purchases 23200 =46400*50% Payment of March credit purchases 9280 =46400*50%*40% Payment of February credit purchases 13500 =45000*50%*60% Total payments 45980
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