1. Edwards Company has the following expected pattern of collections on credit sales: 70 percent collected in the month of sale, 15 percent in the month after the month of sale, and 14 percent in the second month after the month of sale. The remaining 1 percent is never collected.

At the end of May, Edwards Company has the following accounts receivable balances:

From April sales

From May sales

Edwards expected sales for June are $150,000. How much cash will Edwards Company expect to collect in June?

2. Production of Product X has been budgeted at 200,000 units for May. One unit of X requires 2 lbs. of raw material. The projected beginning and ending materials inventory for May are:

Beginning inventory: 2,000 lbs.

Ending inventory: lbs.

How many lbs. of material should be purchased during May?

 

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