Reference no: EM132657584

The Winner Company marks up all merchandise at 25% of gross purchases. All purchases are made on account with terms 1/10 n/60. Purchase discounts which are recorded as miscellaneous income are always taken. Normally, 60% of each month's purchases are paid for in the month of purchase while the 40% are paid during the first 10 days of the first month after the purchase. Inventories of merchandise at the end of each month are kept at 30% of the next month projected cost of sales.

Terms of sales on account are 2/10, n/30. Cash sales are not subject to discount. 50% of each month's sales on account are collected during the month of sales: 45% are collected in succeeding month and the remainder are usually uncollectible: 70% of the collections in the month of sale are subject to discount while 10% of the collection in the succeeding month are subject to discount.

Projected sales data for selected months follow:

Month Sales on acct.-gross Cash sales

December P 1,900,000 P 400,000

January 1,500,000 250,000

February 1,700,000 350,000

March 1,600,000 300,000

Question 1: Projected gross purchases at the end of January is:

Question 2:  Projected inventory at the end of December is:

Question 3: Projected payments to suppliers during February are:

Question 4: Projected sales discounts to be taken by customers making remittance during February:

Question 5: Projected collections from customers during February are: