Dakota Fan, Inc., manufactures an inexpensive household fan that it sells to ret

Question

Dakota Fan, Inc., manufactures an inexpensive household fan that it sells to retailers for $40 per unit. All sales are on account, with 30 percent of sales collected in the month of sale and 70 percent collected in the following month. The data that follow were extracted from the company's accounting records. Dakota Fan maintains a minimum cash balance of $14,000. Total payments in January 20x1 are budgeted at $220,000. A schedule of cash collections for January and February of 20x1 revealed the following receipts for the period: Cash Receipts January February $112,000 From December 31 accounts receivable From January sales From February sales 94,000 $150,000 65,400 March 20x1 sales are expected to total 5,000 units. . Finished-goods inventories are maintained at 30 percent of the following month's sales. The December 31, 20x0, balance sheet revealed the following selected figures: cash, $24,300; accounts receivable, $112,000; and finished goods, $25,050. Required: 1. Determine the number of units that Dakota Fan sold in December 20x0. December sales units 2. Compute the sales revenue for March 20x1 Sales revenue

Explanation / Answer

As per policy, only four parts of a question is allowed to answer, so answering 1 - 5 of the question:

1)70% collection in Jan of Dec month= 112000 Dec month's sale = 112000/70% = $160000 S.P. for the unit = $40 Dec units sale = $160000 / $40 = 4000 units 2)Sales revenue of Mar 20X1 = units sold * SP per unit Sales revenue for Mar 20X1 = 5000 * $40 = $200000 3)Total sales revenue for first quarter 20X1= Jan sales + Feb sales + Mar sales (94000+150000)+(65400/30%)+200000 = $662000 4)Accounts receivable on Mar 31 = 5000*40 * 70% = $140000 5)Finished goods inventory unit as on Dec 31, 20X0 = 30% of jan sold units Janu sales value = $244000 Jan sold units = $244000 / $40 = 6100 units in finished goods inventory as on Dec 31:6100*30%=1830

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