Can you help me with this question please? M7 Inc. budgeted sales and direct mat
ID: 2569223 • Letter: C
Question
Can you help me with this question please?
M7 Inc. budgeted sales and direct materials purchases are as follows:
March Budgeted sales $175,000 Budgeted Direct Material Purchases $23,000
April Budgeted sales $200,000 Budgeted Direct Material Purchases $34,000
May Budgeted sales $275,000 Budgeted Direct Material Purchases $44,000
M7 Inc. sales are 25% cash and 75% credit. It collects credit sales 25% in the month of sale, 35% in the month following sale, and 35% in the second month following sale; 5% are uncollectible. M7 Inc. purchases are 40% cash and 60% on account. It pays purchases on account 55% in the month of purchase, and 45% in the month following purchase.
Required:
Prepare a schedule of expected collections from customers for May.
Prepare a schedule of expected payment for direct materials for May.
Explanation / Answer
1. Schedule of expected collections from customers for May:-
2. Schedule of expected payment for direct materials for May:-
Please Rate or comment if you have any doubt regarding this solution.
Particulars Amount Total sales of May 275,000 Cash sales @25% (A) 68,750 35 % of April month credit sales (200,000 * 75%) * 35% (B) 52,500 35 % of March month credit sales (175,000 * 75%) * 35% (C) 45,937.50 Expected collections from customers for May (A+B+C) 167,187.50