question archive Question Two: (24 marks) (B1, C1) Part A: (10 marks) Ahlia Company's budgeted sales and direct materials purchases are as follows
Question Two: (24 marks) (B1, C1) Part A: (10 marks) Ahlia Company's budgeted sales and direct materials purchases are as follows
Subject:AccountingPrice: Bought3
Question Two: (24 marks) (B1, C1) Part A: (10 marks) Ahlia Company's budgeted sales and direct materials purchases are as follows. Budgeted Sales Budgeted D.M. Purchases January 2021 $300,000 $60,000 February 2021 330,000 70,000 March 2021 350,000 80,000 Ahlia's sales are 40% cash and 60% 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. Ahlia'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 (5 marks each) 1) Prepare a schedule of expected collections from customers for March 2021. March Cash Sales 140000 Collection of March Credit Sales 21,000 COLLECTION OF FEBRUARY 99000 CREDIT SALES COLLECTION JANUARY 64800 CREDIT SALES TOTAL COLLCTION 324800 OF 2) Prepare a schedule of expected payments for direct materials for March 2021. MARCH CASH PURCHASES 40,000 PAYMENT OF MARCH CREDIT 16,000 PURCHASES PAYMENT OF FEBURARY CREDIT 17.500 PURCHASES TOTAL PAYMENT 73,500
