The Winner Company marks up all merchandise at 25% of gross purchases.

 All purchases are made on account with terms 1/10 n/60. Purchase discounts which are recorded as miscellaneous income are always taken. Normally, 60% of each month's purchases are paid for in the month of purchase while the 40% are paid during the first 10 days of the first month after the purchase. Inventories of merchandise at the end of each month are kept at 30% of the next month projected cost of sales.

 

Terms of sales on account are 2/10, n/30. Cash sales are not subject to discount. 50% of each month's sales on account are collected during the month of sales: 45% are collected in succeeding month and the remainder are usually uncollectible: 70% of the collections in the month of sale are subject to discount while 10% of the collection in the succeeding month are subject to discount.

Projected sales data for selected months follow:

Month                    Sales on acct.-gross                      Cash sales

December                    P 1,900,000                             P 400,000

January                            1,500,000                                   250,000

February                          1,700,000                                   350,000

March                              1,600,000                                   300,000

Projected gross purchases at the end of January is:
Projected inventory at the end of December is:
Projected payments to suppliers during February are:
Projected sales discounts to be taken by customers making remittance during February:
Projected collections from customers during February are:

Answer rating: 100% (QA)

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