Reference no: EM132561629

Manal Pvt.Ltd. budgeted income statement for 1st quarter 2020

Description            JANUARY                FEBRUARY                 MARCH

Sales                      285,000                323,000                   221,000

Purchases                  129,000              168,000                    95,000

Wages                          35,000                37,000                    30,000

Supplies                            26,000                23,000              21,500

Utilities                               6,500                    8,700                 7,200

Rent                                    15,000                    12,800                13,600

Insurance                                 12,000                     12,000               12,000

Advertising                                   24,500                  28,500                  18,000

Depreciation                                  20,000                        20,000                  20,000

Net Profit                                           17,000                       13,000                3,700

Manal Receivable Trend:

30% of Sales are collected in the month of sale, 30% of Sales are collected after the month of sale. 40% of Sales are collected two months after the sale is made

Manal Payable Trend:

10% of Purchases are paid for in the month of purchase, 35% of Purchases are paid after the month of purchase, and 55% of Purchases are paid two months after the purchase is made

Additional Information:

Rent and Insurance expense were prepaid at the end of 2020

All other expenses are paid for in the month they were incurred

November Sales = 195,000 November Purchases = 100,000

December Sales = 250,000 December Purchases = 165,000

Required:

Question 1: Calculate to show Jan-Mar 2020 cash collection from sale, cash payment of purchases and total expenses each month separately on the basis of above given data.