Question

Sarasota Company's budgeted sales and direct materials purchases are as follows. January February March Budgeted Sales $261,300 250,800 344,000 Budgeted D.M. Purchases $39,300 43,300 44,000 Sarasota's sales are 30% cash and 70% 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. Sarasota'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. - Your answer is partially correct. Prepare a schedule of expected collections from customers for March. (Round answers to 0 decimal places, e.g. 2,500.) SARASOTA COMPANY Expected Collections from Customers March March cash sales 98940 Collection of March credit sales Collection of January credit sales Collection of February credit sales Total collections

Answer 1

SARASOTA COMPANY
Expected Collections from customers
For March
March Cash sales (344,000 x 30%)	$   103,200.00
Collection of March credit sales [(344,000 x 70%) x 10%]	24,080.00
Collection of February credit sales [(250,800 x 70%) x 50%]	87,780.00
Collection of January credit sales [(261,300 x 70%) x 36%]	65,848.00
Total Collections	$280,908.00
SARASOTA COMPANY
Expected Payments for Direct Materials
For March
March Cash Purchase (44,000 x 50%)	$    22,000.00
Payment of March credit purchases [(44,000 x 50%) x 40%]	8,800.00
Payment of February credit purchases [(43,300 x 50%) x 60%]	12,990.00
Total Payments	$ 43,790.00