Reference no: EM132514966
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 $120,000
From January sales 85,000 $135,000
From February sales 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.
Question 1: Determine the number of units that Badlands sold in December 20x0. December sales __________ units
Question 2: Compute the sales revenue for March 20x1. March sales revenue. ____________
Question 3: Compute the total sales revenue to be reported on Badlands' budgeted income statement for the first quarter of 20x1. First quarter sales revenue ___________
Question 4: Determine the accounts receivable balance to be reported on the March 31, 20x1, budgeted balance sheet. March 31 accounts receivable balance _____________
Question 5: Calculate the number of units in the December 31, 20x0, finished-goods inventory. December 31 finished-goods inventory ________ units
Question 6: Calculate the number of units of finished goods to be manufactured in January 20x1. Finished goods to be manufactured in January ______ units
Question 7: Calculate the financing required in January, if any, to maintain the firm's minimum cash balance. Financing required in January ______