Question

Badlands, Inc. manufactures a household fan that sells for $25 per unit. All sales are on account, with 40 percent of sales collected in the month of sale and 60 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 $32,000. Total payments in January 20x1 are budgeted at $200,000. • A schedule of cash collections for January and February of 20x1 revealed the following receipts for the period: Cash Receipts January February From December 31 accounts receivable From January sales From February sales $120,000 85,000 $135,000 74,000 • March 20x1 sales are expected to total 9,000 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, $23,400; accounts receivable, $120,000; and finished goods, $23,700.

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 3 Firstly we have to calculate the unit sales of january 4 = January sales / selling price per unit 5 = (85000+135000)/25 6 = 8800 Units 8 Now we have to calculate the units sales of febraury = 9 (cash collection of febraury sales in febraury/ 40%)/selling price per unit 10 = (74000/40%)/25 11 = 7400 Units 12 13 Now we canc calculate the units of finished goods produced in January 20x1 14 = desired ending inventory + sales - beginning inventory 15 = (7400*20%) +8800-8800*20%) 16 = 8520 Units 18 Thus the correct answer is 8520 Units