Question

Badlands, Inc. manufactures a household fan that sells for $20 per unit. All sales are on account, with 35 percent of sales collected in the month of sale and 65 percent collected in the following month. The data that follow were extracted from the company's accounting records. • Badlands maintains a minimum cash balance of $28,000. Total payments in January 20x1 are budgeted at $195,000. • A schedule of cash collections for January and February of 20x1 revealed the following receipts for the period: From December 31 accounts receivable From January sales From February sales Cash Receipts January February $117,000 80,000 $121,000 66,500 • March 20x1 sales are expected to total 10,000 units. • Finished-goods inventories are maintained at 20 percent of the following month's sales. • The December 31, 20x0, balance sheet revealed the following selected figures: cash, $22,900; accounts receivable, $117,000; and finished goods, $22,950. Required: 1. Determine the number of units that Badlands sold in December 20x0. 2. Compute the sales revenue for March 20x1. 3. Compute the total sales revenue to be reported on Badlands' budgeted income statement for the first quarter of 20x1. 4. Determine the accounts receivable balance to be reported on the March 31, 20x1, budgeted balance sheet. 5. Calculate the number of units in the December 31, 20x0, finished-goods inventory. 6. Calculate the number of units of finished goods to be manufactured in January 20x1. 7. Calculate the financing required in January, if any, to maintain the firm's minimum cash balance. Answer is complete but not entirely correct. 1. units 2. December sales March sales revenue First quarter sales revenue March 31 accounts receivable balance December 31 finished-goods inventory Finished goods to be manufactured in January Financing required in January 9,000 $ 200,000 $ 592,000 $ 130,000 2,010 1,900 $ 9,940 units units 7.

Answer 1

The answer has been presented in the supporting sheet. All the parts has been solved with detailed explanation and Format. For detailed answer refer to the supporting sheet.

Answer 2 Part 3) 3 First Quarter Sales Revenue 4 = January sales +Febraury sales + March sales 5 = (121000+80000) +(66500/35%) + 10000*20) 6 = $ 591000 8 Thus the correct answer is $ 591000 10 Part 6) Finished goods to be manufactured in January 11 = desired ending inventory + sales - beginning inventory 12 = (((66500/35%)/20)*20%) + (201000/20) - 2010 13 = 9940 Units 15 Thus the correct answer is 9940 Units 17 Part 7) 18 Financing required in January 19 = Desired ending cash balance + cash disbursement - cash receipt - beginning cash balance 20 = 28000 + 195000 - 197000 - 22900 21 = $ 3100 23 Thus the correct answer is $ 3100 24