Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Deco-Bella Furniture PLC (DBF) is a retail business that has established its first store in Horsham and expanded to multiple Australian cities. The store has

Deco-Bella Furniture PLC (DBF) is a retail business that has established its first store in Horsham and expanded to multiple Australian cities. The store has currently signed a contract with various furniture manufacturers to purchase quality products and retails them at competitive price. Customers of DBF are located throughout Australia. Fifty percent of sales are collected in the month of sales; thirty percent is collected in the first month following sales and the remaining twenty percent is collected in the second month after sales. Purchases are normally paid off in the first week of the month following purchases. DBF has never missed a discount of 2% on purchases. Other monthly cash expenses for operating activities (other than purchases) are $14,500. Data regarding purchases and sales for four months of 2020 are given below.

Month

Purchases

Sales Revenue

January

$60,000

$128,000

February

$70,000

$136,000

March

$65,000

$126,000

April

$64,000

$124,000

Required: (show step-by-step computations for each requirement)

1. Calculate the total cash collections for the month of March.(2.5 marks)

2. Determine the amount of cash payments in the month of March.(2.5 marks)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Government and Not-for-Profit Accounting Concepts and Practices

Authors: Michael H. Granof, Saleha B. Khumawala, Thad D. Calabrese, Daniel L. Smith

8th edition

1119495814, 1119495857, 1119495819, 9781119495819 , 978-1119495857

More Books

Students also viewed these Accounting questions

Question

2. What do the others in the network want to achieve?

Answered: 1 week ago

Question

1. What do I want to achieve?

Answered: 1 week ago