PART 5 (20 minutes) Larsen Company budgeted sales and direct materials purchases are as follows: Budgeted purchases Budgeted Sales $200,000 $30,000 January February March 220,000 36,000 270,000 40,000 Larsen sales are 30% cash and 70% on credit. Credit sales are collected 10% in the month of sale, 50% in the month following sale, and 36% in the second month follow sale; 4% are uncollectible. Larsen purchases are 50% cash and 50% on account. Purchases on account are paid 40% in the month of purchase, and 60% in the mont following purchase. Required: 1. Prepare a schedule of expected collections from customers for March. pare a schedule of expected payments for direct materials for March.
PART 5 (20 minutes) Larsen Company budgeted sales and direct materials purchases are as follows: Budgeted purchases Budgeted Sales $200,000 $30,000 January February March 220,000 36,000 270,000 40,000 Larsen sales are 30% cash and 70% on credit. Credit sales are collected 10% in the month of sale, 50% in the month following sale, and 36% in the second month follow sale; 4% are uncollectible. Larsen purchases are 50% cash and 50% on account. Purchases on account are paid 40% in the month of purchase, and 60% in the mont following purchase. Required: 1. Prepare a schedule of expected collections from customers for March. pare a schedule of expected payments for direct materials for March.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
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Transcribed Image Text:PART 5 (20 minutes)
Larsen Company budgeted sales and direct materials purchases are as follows:
Budgeted purchases
Budgeted Sales
$200,000
220,000
January
February
$30,000
36,000
March
270,000
40,000
Larsen sales are 30% cash and 70% on credit. Credit sales are collected 10% in the
month of sale, 50% in the month following sale, and 36% in the second month follow
sale; 4% are uncollectible. Larsen purchases are 50% cash and 50% on account.
Purchases on account are paid 40% in the month of purchase, and 60% in the mont
following purchase.
Required:
1. Prepare a schedule of expected collections from customers for March.
epare a schedule of expected payments for direct materials for March.
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