QUESTION IV 16 Marks The controller of Harrington Compary estimates sales and production for the first four months : of 2016 as follows: Sales are 60% cash and 40% on account, and 60% of credit sales are coliected in the month of the sale. In the month after the sale, 40% of credit sales are collected. it takes 4 kz of direct material to produce a tinished unit, and direct materials cost $6 per kg. All direct materials purchases are on account, and are paid as follows: 40% in the month of the purchase, 60 to the following month. Ending direct materials inventory for each month is 403 of the next month's production needs. January's beginning materials inventory is 1,080kg. Suppose that both accounts receivable and accounts payable are zero at the beginining of January. Instructions: Answer the following questions: (a) What are the total cash sales for the January-March quarter? (2 Marks) (b) What is the accounts receivable balance at the end of March? (2 Marks) (c) What is the direct materials inventory balance at the end of March? (2 Marks) (d) What are material purchases costs for February? (2 Marks) (c) What are cash payments on account for February? (2.Marks) (f) What is the ending balance in accounts payable for March? (2 Marks) (g) What is the cash balance for the period January-March? (4 Marks)