1 Haley Company estimates its sales at 100,000 units in the first quarter and th

Question

1 Haley Company estimates its sales at 100,000 units in the first quarter and that sales will increase by 10,000 units each quarter over the year. They have, and desire, a 25% ending inventory of finished goods. Each quarter. The remainder is received in the quarter following sale. unit sells for $35.40% of the sales are for cash, 70% of the credit customers pay within the 1) cash collections for the third quarter are budgeted how much? 2 Pierce Merchandising Company expects to purchase $90,000 of materials in March and $105,000 of materials in April. Three-quarters of all purchases are paid for in the month of purchase, and the other one- fourth are paid for in the month following the month of purchase. In addition, a 2% discount is received for payments made in the month of purchase. How much will April's cash disbursements for materials purchases bei?

Explanation / Answer

1. Expected cash collection in third quarter :

Third quarter Cash sales (120000*35*40%) 1680000 Add: Cash collection from customer From third quarter sales (120000*35*60%*70%) 1764000 From secon quarter sales (110000*35*60%*30%) 693000 Total cash collection in third quarter 4137000

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