3 Badlands collected 30 of Februarys sales in February or 70500 Thus Februarys

3 badlands collected 30 of februarys sales in

This preview shows page 2 - 3 out of 3 pages.

3. Badlands collected 30% of February’s sales in February, or $70,500. Thus, February’s sales total $235,000 ($70,500 ÷ 0.30). Combining January sales ($91,000 + $144,000), February sales ($235,000), and March sales ($175,000), the company will report revenue of $645,000. 4. Seventy percent of March’s sales will be outstanding, or $122,500 ($175,000 × 70%). 5. Finished-goods inventories are maintained at 30% of the following month’s sales. January sales total $235,000 ($91,000 + $144,000), or 9,400 units ($235,000 ÷ $25). Thus, the December 31 inventory is 2,820 units (9,400 × 30%). 6. February sales will total 9,400 units ($235,000 ÷ $25), giving rise to a January 31 inventory of 2,820 units (9,400 × 30%). Letting X denote production, then: 12/31/x0 inventory + X – January 20x1 sales = 1/31/x1 inventory 2,820 + X – 9,400 = 2,820 X – 6,580 = 2,820 X = 9,400
Image of page 2
7. Financing required is $6,000 ($21,000 minimum balance – $15,000 ending balance): Cash balance, January 1 $ 24,000 Add: January receipts ($105,000 + $91,000) 196,000 Subtotal $220,000 Less: January payments 205,000 Cash balance before financing $ 15,000
Image of page 3

You've reached the end of your free preview.

Want to read all 3 pages?

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern

Stuck? We have tutors online 24/7 who can help you get unstuck.
A+ icon
Ask Expert Tutors You can ask You can ask ( soon) You can ask (will expire )
Answers in as fast as 15 minutes
A+ icon
Ask Expert Tutors