PR $9-34($Algo$)$ Relationships of the Master$-$Budget Components $($LO $9-3,9-5,9-6)$

Badlands Incorporated manufactures a household fan that sells for $$40$ per unit. All sales are on account, with $40$ percent of sales collected in the month of sale and $60$ percent collected in the following month. The data that follow were extracted from the company$$s accounting records.

Badlands maintains a minimum cash balance of $$32,500.$ Total payments in January $20$x$1$ are budgeted at $$397,500.$

A schedule of cash collections for January and February of $20$x$1$ revealed the following receipts for the period:

Cash Receipts

January February

From December $31$ accounts receivable $ $219,000$

From January sales $155,000$ $ $231,000$

From February sales $162,800$

March $20$x$1$ sales are expected to total $10,020$ units.

Finished$-$goods inventories are maintained at $20$ percent of the following month$$s sales.

The December $31,20$x$0,$ balance sheet revealed the following selected figures: cash, $$47,500$; accounts receivable, $$219,000$; and finished goods, $$46,700.$