Create schedule of expected collections from customers

Assignment Help Accounting Basics

Reference no: EM13257303

NIU Company's budgeted sales and direct materials purchase areas follows.

Month BudgetedSales BudgetedD.M. purchases

January $200,000 $30,000

February 220,000 35,000

March 270,000 41,000

Niu's sales are 40% cash and 60% credit. Credit sales arecollected 10% in the month of sale, 50% in the month following thesale and 36% in the second month following the sale; 4% areuncollectible. NIU's purchases are 50% cash and 50% on account.Purchase on account are paid 40% in the month of purchase and 60%in the month following purchase.

Instructions:

a. prepare a schedule of expected collections from customersfor match

b. prepare a schedle of expected payments for direct materialsfor match.

Reference no: EM13257303

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