Question
1. Jo-Jos Yo-yos has the following budgeted sales and direct materials purchases: Month Budgeted Sales Budgeted direct materials purchases January $190,000 $30,000 February $210,000 $35,000
1. Jo-Jos Yo-yos has the following budgeted sales and direct materials purchases:
Month | Budgeted Sales | Budgeted direct materials purchases |
January | $190,000 | $30,000 |
February | $210,000 | $35,000 |
March | $300,000 | $45,000 |
Jo-Jos Yo-yos sales are 40% cash and 60% on credit. It collects credit sales 10% in the month of the sale, 50% in the month following the sale, and 36% in the second month following the sale. 4% of the sales are uncollectible.
Jo-Jos Yo-yos purchases are 50% cash and 50% on account. It pays on account 60% in the month of the purchase and 40% in the month following the purchase.
a. Prepare a schedule of expected cash collections for March
| March |
March cash sales |
|
March credit sales collections |
|
January credit sales collections |
|
February credit sales collections |
|
Total cash collections |
|
Prepare a schedule of expected cash payments for direct materials for March (3 marks)
| March |
March cash purchases |
|
March credit purchases paid |
|
February credit purchases paid |
|
Total cash collections |
|
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started