Swifty Company's budgeted sales and direct materials purchases are as follows. January February March (a) Budgeted Sales $164,000 180,400 205,000 (b) Budgeted D.M. Purchases Swifty's sales are 30% cash and 70% credit. Credit sales are collected 10% in the month of sale, 50% in the month following sale, and 36% in the second month following sale; 4% are uncollectible. Swifty's purchases are 50% cash and 50% on account. Purchases on account are paid 40% in the month of purchase, and 60% in the month following purchase. $24,600 29,520 Total collections 31,160 Prepare a schedule of expected collections from customers for March. SWIFTY COMPANY Schedule of Expected Collections from Customers $ GA $ (A March Prepare a schedule of expected payments for direct materials for March. SWIFTY COMPANY Schedule of Expected Payments for Direct Materials March

Swifty Company's budgeted sales and direct materials purchases are as follows. January February March (a) Budgeted Sales $164,000 180,400 205,000 (b) Budgeted D.M. Purchases Swifty's sales are 30% cash and 70% credit. Credit sales are collected 10% in the month of sale, 50% in the month following sale, and 36% in the second month following sale; 4% are uncollectible. Swifty's purchases are 50% cash and 50% on account. Purchases on account are paid 40% in the month of purchase, and 60% in the month following purchase. $24,600 29,520 Total collections 31,160 Prepare a schedule of expected collections from customers for March. SWIFTY COMPANY Schedule of Expected Collections from Customers $ GA $ (A March Prepare a schedule of expected payments for direct materials for March. SWIFTY COMPANY Schedule of Expected Payments for Direct Materials March

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter4: Financial Planning And Forecasting

Section: Chapter Questions

Problem 4P

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Concept explainers

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.

Question

Swifty Company's budgeted sales and direct materials purchases are as follows.
January
February
March
(a)
Budgeted
Sales
$164,000
180,400
205,000
(b)
Budgeted D.M. Purchases
Swifty's sales are 30% cash and 70% credit. Credit sales are collected 10% in the month of sale, 50% in the month following sale, and
36% in the second month following sale; 4% are uncollectible. Swifty's purchases are 50% cash and 50% on account. Purchases on
account are paid 40% in the month of purchase, and 60% in the month following purchase.
Total collections
Prepare a schedule of expected collections from customers for March.
$24,600
SWIFTY COMPANY
Schedule of Expected Collections from Customers
V
Total payments
29,520
V
31,160
V
$
$
March
Prepare a schedule of expected payments for direct materials for March.
SWIFTY COMPANY
Schedule of Expected Payments for Direct Materials
March
10000

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