Exercise 23-17 Nieto Company\'s budgeted sales and direct materials purchases ar

Question

Exercise 23-17 Nieto Company's budgeted sales and direct materials purchases are as follows. Budgeted D.M. anuary February March Budgeted Sales 251,100 282,800 242,600 $35,100 40,100 46,700 Neto's sales are 30% cash and 70% edit. 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.

Explanation / Answer

Req A Expected collections from customer for Mar Amount in $ Cash Sales of march month(342600*30% cash sales) 102780 Credit Sales of March month(10% of 70% of 342600) 23982 Credit Sales of Feb month(50% of 70% of 282800) 98980 Credit Sales of jan month(36% of 70% of 251100) 63277.2 Total collection for the month of march 289,019.20 Req B Expected payments for materials for March month Amount in $ Cash purchase of March month(50% of 46700) 23350 Credit purchase of March month(40% of 50% of 46700) 9340 Credit purchase of Feb month(60% of 50% of 40100) 12030 Total cash payment for March month for Material $44,720

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