Prepare a schedule for the budgeted cash receipts

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Reference no: EM133264941

Question

ErgoVogue Company manufactures and sells its chairs to offices and educational institutions. ErgoVogue expects to sell 1,500 chairs for $175 each in January, and 1,750 chairs for $175 each in February. All sales are cash only.

Assume that ErgoVogue 's sales are collected as follows:

50% in the month of the sale

30% in the month after the sale

18% two months after the sales

2% never collected

November sales totaled $300,000 and December sales were $325,000. Prepare a schedule for the budgeted cash receipts from customers for January and February.

Round answers to the nearest dollar.

Required:

Question 1: Prepare a schedule for the budgeted cash receipts from customers for January and February. Round answers to the nearest dollar.

Question 2: Assume ErgoVogue Company pays for direct materials purchases 55% in the month of purchase and 45% in the month after purchase. The Accounts Payable balance on January 1 is $45,000. Total direct materials purchases for January were $ 57,505 and February were $ 147,245.

Prepare a schedule for the budgeted cash payments for purchases for January and February. Round to the nearest dollar.

Reference no: EM133264941

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