Colter Company prepares monthly cash budgets. Relevant data from operating budge
ID: 2504618 • Letter: C
Question
Colter Company prepares monthly cash budgets. Relevant data from operating budgets for 2014 are:January February Sales $394,800 $451,200 Direct materials purchases 124,080 146,640 Direct labor 101,520 112,800 Manufacturing overhead 78,960 84,600 Selling and administrative expenses 89,112 97,008
All sales are on account. Collections are expected to be 50% in the month of sale, 30% in the first month following the sale, and 20% in the second month following the sale. Sixty percent (60%) of direct materials purchases are paid in cash in the month of purchase, and the balance due is paid in the month following the purchase. All other items above are paid in the month incurred except for selling and administrative expenses that include $1,128 of depreciation per month.
Other data:
1. Credit sales: November 2013, $293,280; December 2013, $360,960. 2. Purchases of direct materials: December 2013, $112,800. 3. Other receipts: January Colter Company prepares monthly cash budgets. Relevant data from operating budgets for 2014 are:
January February Sales $394,800 $451,200 Direct materials purchases 124,080 146,640 Direct labor 101,520 112,800 Manufacturing overhead 78,960 84,600 Selling and administrative expenses 89,112 97,008
All sales are on account. Collections are expected to be 50% in the month of sale, 30% in the first month following the sale, and 20% in the second month following the sale. Sixty percent (60%) of direct materials purchases are paid in cash in the month of purchase, and the balance due is paid in the month following the purchase. All other items above are paid in the month incurred except for selling and administrative expenses that include $1,128 of depreciation per month.
Other data:
1. Credit sales: November 2013, $293,280; December 2013, $360,960. 2. Purchases of direct materials: December 2013, $112,800. 3. Other receipts: January January February Question 9 Colter Company prepares monthly cash budgets. Relevant data from operating budgets for 2014 are:
January February Sales $394,800 $451,200 Direct materials purchases 124,080 146,640 Direct labor 101,520 112,800 Manufacturing overhead 78,960 84,600 Selling and administrative expenses 89,112 97,008
All sales are on account. Collections are expected to be 50% in the month of sale, 30% in the first month following the sale, and 20% in the second month following the sale. Sixty percent (60%) of direct materials purchases are paid in cash in the month of purchase, and the balance due is paid in the month following the purchase. All other items above are paid in the month incurred except for selling and administrative expenses that include $1,128 of depreciation per month.
Other data:
1. Credit sales: November 2013, $293,280; December 2013, $360,960. 2. Purchases of direct materials: December 2013, $112,800. 3. Other receipts: January
Explanation / Answer
Hi,
Please find the answer as follows:
Part A: Expected Collections from Customers
Part B: Expected Payments for Direct Materials
Notes:
Expected Collection from Customers
November Sales Collected in January = 293280*20% = 58656
December Sales Collected in January = 360960*30% = 108288
January Sales Collected in January =394800*050% = 197400
December Sales Collected in February = 360960*20% = 72192
January Sales Collected in February = 394800*30% = 118440
February Sales Collected in February = 451200*50% = 225600
Expected Payments for Direct Materials
December Purchases paid in January =112800*40% = 45120
January Purchases paid in January = 124080*60% = 74448
January Purchases paid in February = 124080*40% = 49632
February Purchases paid in February = 146640*60% = 87984
Thanks.
January February November 58656 0 December 108288 72192 January 197400 118440 February 0 225600 Total Collections 364344 416232