Fluffy Pillows makes decorative throw pillows for home use. The following information was taken from the...

Transcribed Image Text:

Fluffy Pillows makes decorative throw pillows for home use. The following information was taken from the Fluffy Pillows sales budget: (Click the icon to view the first quarter sales budget.) Assume the following additional information was gathered about the types of sales made in the fourth quarter (October through December) of the previous year: (Click the icon to view the fourth quarter sales budget.) The following information was taken from the Fluffy Pillows direct materials budget: (Click the icon to view information from the direct materials budget.) Read the requirements. Requirement 1. Prepare the cash collections budget for January, February, and March, as well as the summary for the first quarter. Fluffy Pillows Cash Collections Budget For the Quarter Ended March 31 Cash sales Collections on credit sales: 75% of credit sales made last month 15% of credit sales made two months ago 8% of credit sales made three months ago Total cash collections Data table Data table Fluffy Pillows Sales Budget: Type of Sale For the Quarter Ended December 31 Type of Sale: October November December 4th Quarter January February March 220,000 $ 360,000 $ 1st Quarter 380,000 $ Cash sales (10%) $ 142,600 $ 960,000 Credit sales (90%) 1,283,400 151,100 $ 1,359,900 137,000 $ 1,233,000 $ Total sales revenue $ 1,426,000 $ 1,511,000 $ 1,370,000 $ 430,700 3,876,300 4,307,000 102,672 Fluffy Pillows Excerpt from Direct Materials Budget Data table Print Done Fluffy Pillows Sales Budget: Type of Sale For the Quarter Ended March 31 Total cost of DM purchases For the Quarter Ended March 31 January February $ March 1st Quarter 911,520 $ 1,316,160 $ 1,404,360 $ 3,632,040 Assume that the total cost of direct materials purchases in December was $725,000. The company pays 40% of its direct materials purchases in the month of purchase, and pays the remaining 60% in the month after purchase. Type of Sale: Cash sales (10%) January February March $220,000 Credit sales (90%) 1,980,000 $360,000 3,240,000 $380,000 3,420,000 1st Quarter $960,000 $8,640,000 Total sales revenue $2,200,000 $3,600,000 $3,800,000 $9,600,000 The company's collection history indicates that 75% of credit sales is collected in the month after the sale. 15% is collected two months after the sale, 8% is collected three months after the sale, and the remaining 2% is never collected. Print Done Print Done Fluffy Pillows makes decorative throw pillows for home use. The following information was taken from the Fluffy Pillows sales budget: (Click the icon to view the first quarter sales budget.) Assume the following additional information was gathered about the types of sales made in the fourth quarter (October through December) of the previous year: (Click the icon to view the fourth quarter sales budget.) The following information was taken from the Fluffy Pillows direct materials budget: (Click the icon to view information from the direct materials budget.) Read the requirements. Requirement 1. Prepare the cash collections budget for January, February, and March, as well as the summary for the first quarter. Fluffy Pillows Cash Collections Budget For the Quarter Ended March 31 Cash sales Collections on credit sales: 75% of credit sales made last month 15% of credit sales made two months ago 8% of credit sales made three months ago Total cash collections Data table Data table Fluffy Pillows Sales Budget: Type of Sale For the Quarter Ended December 31 Type of Sale: October November December 4th Quarter January February March 220,000 $ 360,000 $ 1st Quarter 380,000 $ Cash sales (10%) $ 142,600 $ 960,000 Credit sales (90%) 1,283,400 151,100 $ 1,359,900 137,000 $ 1,233,000 $ Total sales revenue $ 1,426,000 $ 1,511,000 $ 1,370,000 $ 430,700 3,876,300 4,307,000 102,672 Fluffy Pillows Excerpt from Direct Materials Budget Data table Print Done Fluffy Pillows Sales Budget: Type of Sale For the Quarter Ended March 31 Total cost of DM purchases For the Quarter Ended March 31 January February $ March 1st Quarter 911,520 $ 1,316,160 $ 1,404,360 $ 3,632,040 Assume that the total cost of direct materials purchases in December was $725,000. The company pays 40% of its direct materials purchases in the month of purchase, and pays the remaining 60% in the month after purchase. Type of Sale: Cash sales (10%) January February March $220,000 Credit sales (90%) 1,980,000 $360,000 3,240,000 $380,000 3,420,000 1st Quarter $960,000 $8,640,000 Total sales revenue $2,200,000 $3,600,000 $3,800,000 $9,600,000 The company's collection history indicates that 75% of credit sales is collected in the month after the sale. 15% is collected two months after the sale, 8% is collected three months after the sale, and the remaining 2% is never collected. Print Done Print Done

Answer rating: 100% (QA)

To prepare the cash collections budget for Fluffy Pillows for the first quarter January February and ... View the full answer