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Question - Sunland Company's budgeted sales and direct materials purchases are as follows:
Budgeted Sales
Budgeted Direct Materials Purchases
January
$195,000
$32,000
February
219,000
33,000
March
305,000
49,000
Sunland's sales are 40% cash and 60% credit. It collects credit sales 10% in the month of sale, 50% in the month following sale, and 36% in the second month following sale; 4% are uncollectible. Sunland's purchases are 50% cash and 50% on account. It pays purchases on account 60% in the month of purchase, and 40% in the month following purchase.
Required -
1. Prepare a schedule of expected collections from customers for March.
2. Prepare a schedule of expected payments for direct materials for March.
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