Reference no: EM132463973

Question 1 - Marker Products m sells all of its products on credit. The company expects to collect 65 percent of sales in the quarter of sale and 35 percent the quarter following the sale. Accounts receivable at the end of last year totaled $3 million, all of which will be collected in the first quarter of the coming year. Marker's sales budget shows the following projected sales revenues:

Quarter 1: $8,800,000

Quarter 2: $11,000,000

Quarter 3: $11,440,000

Quarter 4: $10,560,000

Required - Prepare a budget for cash collections from sales for each of the four quarters.

Question 2 - Bailey Company purchases all direct materials on credit. The company expects to pay 60 percent of purchases in the quarter of purchase and 40 percent the following quarter. Accounts payable at the end of last year totaled $1,000,000, all of which will be paid in the first quarter of this coming year. Bailey's direct materials purchases budget shows the following projected cost of materials to be purchased:

Quarter 1: $2,150,000

Quarter 2: $2,250,000

Quarter 3: $2,470,000

Quarter 4: $2,230,000

Required - Prepare a cash payments budget for purchases of materials for each of the four quarters.