Question 27 Hagen Companys budgeted sales and direct materia

Question 27 Hagen Company\'s budgeted sales and direct materials purchases are as follows. Budgeted Sales Budgeted D.M. January February $300,000 330,000 350,000 $60,000 70,000 80,000 March Hagen\'s sales are 40% cash and 60% credit. Credit sales are collected 10% in the month of sale, 50% in the month following sale, and 36% in the second month following sale; 4% are uncollectible. Hagen\'s purchases are 50% cash and 50% on account. Purchases on account are paid 40% in the month of purchase, and 60% in the month following purchase. Prepare a schedule of expected collections from customers for March. HAGEN COMPANY Expected Collections from Customers March Cash Sales Collection of March Credit Sales Collection of February Credit Sales Collection of January Credit Sales Total Collections Prepare a schedule of expected payments for direct materials for March. HAGEN COMPANY Expected Payments for Direct Materials March Cash Purchases Payment of March Credit Purchases Payment of February Credit Purchases Total Payments Click if you would like to Show Work for this question: Qesn Show Work

Solution

EXPECTED COLLECTIONS FROM CUSTOMERS

EXPECTED PAYMENTS FOR DIRECT MATERIALS

MARCH CASH SALES ($350,000*40%)	$140,000
COLLECTION OF MARCH CREDIT SALES ($350,000*60%*10%)	$21,000
COLLECTION OF FEBRUARY CREDIT SALES ($330,000*60%*50%	$99,000
COLLECTION OF JANUARY CREDIT SALES ($300,000*60%*36%)	$64,800
TOTAL COLLECTIONS	$324,800