Pillows Ltd. makes decorative throw pillows for home use. The following information was taken from the The following information was taken from the Pillows Lid. direct materials budget: Pillows Lid. sales budget: (Click the icon to view information from the direct materials budget.) (Click the icon to view the first quarter sales budget.) Read the requirements. Assume the following additional information was gathered about the types of sales made in the fourth quarter (October through December) of the previous year: (Click the icon to view the fourth quarter sales budget.)Data Table Pillows Ltd. Sales Budget: Type of Sale For the Quarter Ended March 31 Type of Sale: January February March 1st Quarter Cash sales (10%) $320,000 $336,000 $344,000 $1,000,000 2,880,000 3,024,000 3,096,000 $9,000,000 $3,200,000 $3,360,000 $3,440,000 $10,000,000 Credit sales (90%) Total sales revenue The companY's collection history indicates that 75% of credit sales is collected in the month after the sale, 15% is collected two months after the sale, 8% is collected three months after the sale, and the remaining 2% is never collected. X Data Table Pillows Ltd. Sales Budget: Type of Sale For the Quarter Ended December 31 Type of Sale: October November December 4th Quarter Cash sales (10%) 142,800 $ 137,200 $ 137,200 $ 417,200 Credit sales (90%) 1,285,200 1,360,800 1,234,800 $ 3,880,800 1,428,000 $ 1,372,000 $ 1,372,000 $ 4, 172,000 Total sales revenue Print DonePillows Ltd. Excerpt from Direct Materials Budget For the Quarter Ended March 31 January February March 1st Quarter Total cost of DM purchases w w M w Assume that the total cost of direct materials purchases in December was $725,000. The company pays 40% of its direct materials purchases in the month of purchase, and pays the remaining 60% in the month after purchase. Requirements m the Pillows Ltd. direct materials budget: from the direct materials budget.) For the Quarter Ended March 31 January February March quarter. Cash sales Collections on credit sales: 75% of credit sales made last month 15% of credit sales made two months ago 8% of credit gala: made thrAn mnnth: :nn Prepare the cash collections budget for January, February, and March, as well as the summary for the rst quarter. 2. Prepare the cash payments budget for direct materials purchases for the months of January, February, and March, as well as a summary for the Done Pillows Ltd. makes decorative throw pillows for home use. The following information was taken from the The following information was taken from the Pillows Ltd. direct materials budget: Pillows Ltd. sales budget: a (Click the icon to view information from the direct materials budget.) a (Click the icon to view the rst quarter sales budget.) . . . . . _ Read the muirements. Assume the followrng additional Information was gathered about the types of sales made In the fourth quarter (October through December) of the previous year: a (Click the icon to view the fourth quarter sales budget.) Requirement 1. Prepare the cash collections budget for January, February, and March, as well as the summary for the rst quarter. Pillows Ltd. Cash Collections Budget For the Quarter Ended March 31 January February March 1st Quarter Cash sales I Collections on credit sales: 75% of credit sales made last month 1 15% of credit sales made two months ago 1 8% of credit sales made three months ago Total cash collections Requirement 2. Prepare the cash payments budget for direct materials purchases for the months of January, February, and March, as well as a summary for the quarter. Pillows Ltd. Cash Payments Budget - Direct Materials For the Quarter Ended March 31 January February March 1st Quarter 40% of current month DM purchases 60% of last month's DM purchases Total cash payments for DM
