The controller of Kari Company estimates sales and production for the first four months of 2020...

Transcribed Image Text:

The controller of Kari Company estimates sales and production for the first four months of 2020 as follows: January February March April $35,000 Sales $40,000 $50,000 $60,000 3,000 Production in units 2,000 2,500 3,500 Sales are 60% cash and 40% on account, and 40% of credit sales are collected in the month of the sale. In the month after the sale, 60% of credit sales are collected. It takes 5 kg of direct material to produce a fin- ished unit, and direct materials cost $6 per kg. All direct materials purchases are on account, and are paid as follows: 60% in the month of the purchase and 40% the following month. Ending direct materials inventory for each month is 20% of the next month's production needs. January's beginning materials inventory is 2,000 kg. Suppose that'both accounts receivable and accounts payable are zero at the beginning of January. Instructions a. What are the total cash sales for the January-March quarter? b. What is the accounts receivable balance at the end of March? c. What is the direct materials inventory balance at the end of March? d. What are the materials purchases costs for February? e. What are cash payments on account for February? f. What is the ending balance in accounts payable for March? g. What is the change in the cash balance for the period January-March? The controller of Kari Company estimates sales and production for the first four months of 2020 as follows: January February March April $35,000 Sales $40,000 $50,000 $60,000 3,000 Production in units 2,000 2,500 3,500 Sales are 60% cash and 40% on account, and 40% of credit sales are collected in the month of the sale. In the month after the sale, 60% of credit sales are collected. It takes 5 kg of direct material to produce a fin- ished unit, and direct materials cost $6 per kg. All direct materials purchases are on account, and are paid as follows: 60% in the month of the purchase and 40% the following month. Ending direct materials inventory for each month is 20% of the next month's production needs. January's beginning materials inventory is 2,000 kg. Suppose that'both accounts receivable and accounts payable are zero at the beginning of January. Instructions a. What are the total cash sales for the January-March quarter? b. What is the accounts receivable balance at the end of March? c. What is the direct materials inventory balance at the end of March? d. What are the materials purchases costs for February? e. What are cash payments on account for February? f. What is the ending balance in accounts payable for March? g. What is the change in the cash balance for the period January-March?

Answer rating: 100% (QA)

Compute the accounts receivable balance at the end of March Step 1 Compute the amount of c... View the full answer