Exercise 3 (Chapter 141-Preparing a sales budget Congress Company, which expects

Question

Exercise 3 (Chapter 141-Preparing a sales budget Congress Company, which expects to start operations on January 1, 2018, will sell digital cameras in shopping malls. Congress has budgeted sales as indicated in the following table. The company expects a 10% increase in sales per month for February and March. The ratio of cash sales to sales on account will remain stable from January through March. Sales Cash Sales Sales on Account January February March $50,000 ? 120,000 Total Budgeted Sales S170,000? Required a. b. Complete the sales budget by filling in the missing amounts. Determine the amount of sales revenue Congress will report on its first quarter pro forma income statement.

Explanation / Answer

a) Complete sales budget :

b) Sales revenue in first quarter income statement is (170000+187000+205700) = 562700

Sales January February march Cash sales 50000 55000 60500 Sales on account 120000 132000 145200 Total budgeted sales 170000 187000 205700

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