Thirty percent of all sales are for cash; the remaining 70% are on account. Creditsales have the f

ollowing collection pattern:

1. Prepare a schedule of cash collections for May through July.
2. Compute the expected balance in Accounts Receivable as of July 31.
3. The following information has been extracted from the firm’s accounting records:
   • 1)Allsalesaremadeonaccountat$20perunit.Sixtypercentofthesalesarecollectedinthemonthofsale;theremaining40%arecollectedinthefollowingmonth.Forecastedsalesforthefirst5monthsof20X2areasfollows:January,1,500units;February,1,600units;March,1,800units;April,2,000units;andMay,2,100units.
   • 2)Managementwantstomaintainthefinishedgoodsinventoryat30%ofthefollowingmonth’ssales.
   • 3)Watsonusesfourunitsofdirectmaterialineachfinishedunit.Thedirectmaterialpricehasbeenstableandisexpectedtoremainsooverthenext6months.Managementwantstomaintaintheendingdirectmaterialsinventoryat60%ofthefollowingmonth’sproductionneeds.
   • 4)Seventypercentofallpurchasesarepaidinthemonthofpurchase;theremaining30%arepaidinthesubsequentmonth.
   • 5)Watson’sproductrequires30minutesofdirectlabortime.Eachhourofdirectlaborcosts$7.
   Instructions
   1. Roundingcomputationstothenearestdollar,preparethefollowingforJanuarythroughMarch:
      • 1)Salesbudget
      • 2)Scheduleofcashcollections
      • 3)Productionbudget
      • 4)Directmaterialpurchasesbudget
      • 5)Scheduleofcashdisbursementsformaterialpurchases
      • 6)Directlaborbudget
   2. DeterminethebalancesinthefollowingaccountsasofMarch31:
      • 1)AccountsReceivable
      • 2)DirectMaterials
      • 3)AccountsPayable

Looking for a Similar Assignment? Order now and Get 10% Discount! Use Coupon Code "Newclient"