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For the first quarter of 2021, ABC Firm prepared the following sales budget and purchases budget. Sales Budget April May June Total Unit Sales 4,600 3,500 7,300 15,400 SP 8 8 8 8 Sales 36,800 $ 28,000 $ 58,400 $ 123,200 Purchases Budget April May June Total Unit Sales 4,600 3,500 7,300 15,400 El 700 1,460 660 660 Unit Required 5,300 4,960 7,960 16,060 BI 890 700 1,460 890 Units 2 B Purchased 4,410 4,260 6,500 15,170 Cost 5 5 5 Purchases 22,050 $ 21,300 $ 32,500 $ 75,850

For the first quarter of 2021, ABC Firm prepared the following sales budget and purchases budget. Sales Budget April May June Total Unit Sales 4,600 3,500 7,300 15,400 SP 8 8 8 8 Sales 36,800 $ 28,000 $ 58,400 $ 123,200 Purchases Budget April May June Total Unit Sales 4,600 3,500 7,300 15,400 El 700 1,460 660 660 Unit Required 5,300 4,960 7,960 16,060 BI 890 700 1,460 890 Units 2 B Purchased 4,410 4,260 6,500 15,170 Cost 5 5 5 Purchases 22,050 $ 21,300 $ 32,500 $ 75,850

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Problem 1. For the first quarter of 2021, ABC Firm prepared the following sales budget and purchases budget. Sales Budget April May June Total Unit Sales 4,600 3,500 7,300 15,400 SP 8 8 8 8 Sales 36,800 $ 28.000 $ 58,400 $ 123,200 Purchases Budget April May June Total Unit Sales 4,600 3,500 7,300 15,400 El 700 1,460 660 660 Unit Required 5,300 4,960 7,960 16,060 BI 890 700 1,460 890 Units 2 B Purchased 4,410 4,260 6,500 15,170 Cost 5 Purchases 22,050 $ 21,300 $ 32,500 $ 75,850 The firm sells 75% of its items on account. Of the items sold on account, 20% are collected in the month of the sale. The month after the sale, the firm collects 50% and the month after that, it collects 25%. Actual units sales in January were 4,800. In February unit sales were 2,700 and in March, they were 5,900. 1. What is the firm's apparent policy for inventory on hand at the end of each month?
Transcribed Image Text:Problem 1. For the first quarter of 2021, ABC Firm prepared the following sales budget and purchases budget. Sales Budget April May June Total Unit Sales 4,600 3,500 7,300 15,400 SP 8 8 8 8 Sales 36,800 $ 28.000 $ 58,400 $ 123,200 Purchases Budget April May June Total Unit Sales 4,600 3,500 7,300 15,400 El 700 1,460 660 660 Unit Required 5,300 4,960 7,960 16,060 BI 890 700 1,460 890 Units 2 B Purchased 4,410 4,260 6,500 15,170 Cost 5 Purchases 22,050 $ 21,300 $ 32,500 $ 75,850 The firm sells 75% of its items on account. Of the items sold on account, 20% are collected in the month of the sale. The month after the sale, the firm collects 50% and the month after that, it collects 25%. Actual units sales in January were 4,800. In February unit sales were 2,700 and in March, they were 5,900. 1. What is the firm's apparent policy for inventory on hand at the end of each month?
The firm sells 75% of its items on account. Of the items sold on account, 20% are collected in the month of the sale. The month after the sale, the firm collects 50% and the month after that, it collects 25%. Actual units sales in January were 4,800. In February unit sales were 2,700 and in March, they were 5,90o. 1. What is the firm's apparent policy for inventory on hand at the end of each month? 2. What are expected unit sales for July? 3. Prepare a properly formatted budget of cash collections.
Transcribed Image Text:The firm sells 75% of its items on account. Of the items sold on account, 20% are collected in the month of the sale. The month after the sale, the firm collects 50% and the month after that, it collects 25%. Actual units sales in January were 4,800. In February unit sales were 2,700 and in March, they were 5,90o. 1. What is the firm's apparent policy for inventory on hand at the end of each month? 2. What are expected unit sales for July? 3. Prepare a properly formatted budget of cash collections.
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