31. Budgets for Cash Collections from Sales and Cash Payments for Purchases. Car Products, Inc., produces car covers. The dollar amount of the company's quarterly sales and direct materials purchases are projected to be as follows (this information is derived from the previous exercises): 1st 2nd 3rd 4th Sales $ 3,510,000 $ 5,850,000 $ 7,020,000 $ 4,680,000 Direct materials purchases 434,928 $ 649,584 $ 696,336 $ 543,408 Assume all sales are made on credit. The company expects to collect 80 percent of sales in the quarter of sale and 20 percent the quarter following the sale. Accounts receivable at the end of last year totaled $600,000, all of which will be collected in the first quarter of the coming year. Assume all direct materials purchases are on credit. The company expects to pay 90 percent of purchases in the quarter of purchase and 10 percent the following quarter. Accounts payable at the end of last year totaled $45,000, all of which will be paid in the first quarter of this coming year. Required: a. Prepare a budget for cash collections from sales for Car Products, Inc. Use a format similar to the top section of Figure 9.5. b. Prepare a budget for cash payments for purchases of materials for Car Products, Inc. Use a format similar to the middle section of Figure 9.5. Round to the nearest dollar.

31. Budgets for Cash Collections from Sales and Cash Payments for Purchases. Car Products, Inc., produces car covers. The dollar amount of the company's quarterly sales and direct materials purchases are projected to be as follows (this information is derived from the previous exercises): 1st 2nd 3rd 4th Sales $ 3,510,000 $ 5,850,000 $ 7,020,000 $ 4,680,000 Direct materials purchases 434,928 $ 649,584 $ 696,336 $ 543,408 Assume all sales are made on credit. The company expects to collect 80 percent of sales in the quarter of sale and 20 percent the quarter following the sale. Accounts receivable at the end of last year totaled $600,000, all of which will be collected in the first quarter of the coming year. Assume all direct materials purchases are on credit. The company expects to pay 90 percent of purchases in the quarter of purchase and 10 percent the following quarter. Accounts payable at the end of last year totaled $45,000, all of which will be paid in the first quarter of this coming year. Required: a. Prepare a budget for cash collections from sales for Car Products, Inc. Use a format similar to the top section of Figure 9.5. b. Prepare a budget for cash payments for purchases of materials for Car Products, Inc. Use a format similar to the middle section of Figure 9.5. Round to the nearest dollar.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter7: Budgeting

Section: Chapter Questions

Problem 13EA: What is the amount of budgeted cash payments if purchases are budgeted for $420,000 and the...

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