Chapter 9, Problem 9.17E

Nieto Company’s budgeted sales and direct materials purchases are as follows.

	Budgeted Sales	Budgeted D.M. Purchases
January	$200,000	$30,000
February	220,000	36,000
March	250,000	38,000

Nieto’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. Nieto’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.

Instructions

(a) Prepare a schedule of expected collections from customers for March.

(b) Prepare a schedule of expected payments for direct materials for March.