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Al Rawahi Company's budgeted sales and direct materials purchases are as follows: Months Budgeted Sales Budget D M Purchases Аpril 250000 32000 Мay 270000 38500 June 320000 44400 Al Rawahi sales are 30% cash and 70% credit. Credit sales are collected as 25% in the month of sale, 35% in the month following sale, and 38% in the second month following sale; 2% are uncollectible. Al Rawahi purchases are 40% cash and 60% on account. Purchases on account are paid 45% in the month of purchase, and 55% in the month following purchase. Instructions A. Prepare a schedule of expected collections from customers for June.(4 marks) B. Prepare a schedule of expected payments for direct materials for June.(3 marks)

Al Rawahi Company's budgeted sales and direct materials purchases are as follows: Months Budgeted Sales Budget D M Purchases Аpril 250000 32000 Мay 270000 38500 June 320000 44400 Al Rawahi sales are 30% cash and 70% credit. Credit sales are collected as 25% in the month of sale, 35% in the month following sale, and 38% in the second month following sale; 2% are uncollectible. Al Rawahi purchases are 40% cash and 60% on account. Purchases on account are paid 45% in the month of purchase, and 55% in the month following purchase. Instructions A. Prepare a schedule of expected collections from customers for June.(4 marks) B. Prepare a schedule of expected payments for direct materials for June.(3 marks)

Understanding Business
Understanding Business
12th Edition
ISBN:9781259929434
Author:William Nickels
Publisher:William Nickels
Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment
Section: Chapter Questions
Problem 1CE
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Q1. Al Rawahi Company's budgeted sales and direct materials purchases are as follows: Months Budgeted Sales Budget D M Purchases April 250000 32000 May 270000 38500 320000 44400 June Al Rawahi sales are 30% cash and 70% credit. Credit sales are collected as 25% in the month of sale, 35% in the month following sale, and 38% in the second month following sale; 2% are uncollectible. Al Rawahi purchases are 40% cash and 60% on account. Purchases on account are paid 45% in the month of purchase, and 55% in the month following purchase. Instructions A. Prepare a schedule of expected collections from customers for June.(4 marks) B. Prepare a schedule of expected payments for direct materials for June. (3 marks) Q2: O Focus ed Kingdom)
Transcribed Image Text:Q1. Al Rawahi Company's budgeted sales and direct materials purchases are as follows: Months Budgeted Sales Budget D M Purchases April 250000 32000 May 270000 38500 320000 44400 June Al Rawahi sales are 30% cash and 70% credit. Credit sales are collected as 25% in the month of sale, 35% in the month following sale, and 38% in the second month following sale; 2% are uncollectible. Al Rawahi purchases are 40% cash and 60% on account. Purchases on account are paid 45% in the month of purchase, and 55% in the month following purchase. Instructions A. Prepare a schedule of expected collections from customers for June.(4 marks) B. Prepare a schedule of expected payments for direct materials for June. (3 marks) Q2: O Focus ed Kingdom)
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