Sunland State sells electronic products. The controller is responsible for preparing the master budget and has accumulated th information below for the months of January, February, and March. Balances at January 1 are expected to be as follows: Cash $5,890 Accounts receivable 445,200 The budget is to be based on the following assumptions: 1. 2. 3. 4. 5. Inventories Accounts payable 6. $331,100 142,400 Each month's sales are billed on the last day of the month. Customers are allowed a 3% discount if their payment is made within 10 days after the billing date. Receivables are books gross. The company collects 60% of the billings within the discount period, 25% by the end of the month after the date of sale, an 9% by the end of the second month after the date of sale: 6% prove uncollectible. It pays 54% of all materials purchases and the selling, general, and administrative expenses in the month purchased and th remainder in the following month. Each month's units of ending inventory are equal to 130% of the next month's units of sales. The cost of each unit of inventory is $20. Selling, general, and administrative expenses, of which $2,100 is for depreciation, are equal to 15% of the current month's sales.

Sunland State sells electronic products. The controller is responsible for preparing the master budget and has accumulated th information below for the months of January, February, and March. Balances at January 1 are expected to be as follows: Cash $5,890 Accounts receivable 445,200 The budget is to be based on the following assumptions: 1. 2. 3. 4. 5. Inventories Accounts payable 6. $331,100 142,400 Each month's sales are billed on the last day of the month. Customers are allowed a 3% discount if their payment is made within 10 days after the billing date. Receivables are books gross. The company collects 60% of the billings within the discount period, 25% by the end of the month after the date of sale, an 9% by the end of the second month after the date of sale: 6% prove uncollectible. It pays 54% of all materials purchases and the selling, general, and administrative expenses in the month purchased and th remainder in the following month. Each month's units of ending inventory are equal to 130% of the next month's units of sales. The cost of each unit of inventory is $20. Selling, general, and administrative expenses, of which $2,100 is for depreciation, are equal to 15% of the current month's sales.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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