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Schedule of Expected Collections and Payments

Budgeted sales

NIU Company's budgeted sales and direct materials purchases are as follows.
Budgeted Sales Budgeted D.M. Purchases
January $258,000 $38,700
February 283,800 45,150
March 348,300 52,890
NIU'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. NIU'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.
Expected Collections from Customers
March cash sales $ 139,320

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.
Expected Payments for Direct Materials
March cash purchases $

Payment of March credit purchases

Payment of February credit purchases

Total payments $


Solution Summary

The solution explains how to prepare the expected schedule of collections and payments for direct materials