(answered) – 1) Accounts Receivable 4,320 will be due after sales- My questionDescriptionSolution downloadThe Question1) Accounts Receivable ?4,320 will be due after sales- My question is how did they get this number, I am having an extremely hard time with this asignmentWeek 4 AssignmentSimone RohanACC 206 PRINCIPLES OF ACCOUNTING IIProf. Wanda MorganAugust 5, 2013ACC 206 Week 4 Assignment: Chapter 6 and 7 ProblemsPlease complete the following exercises below in either Excel or a word document (but must be single document).You must show your work where appropriate (leaving the calculations within Excel cells is acceptable). Save thedocument, and submit it in the appropriate week using the Assignment Submission button.Chapter 6 Problem 31. Comprehensive budgetingThe balance sheet of Watson Company as of December 31, 20X1, follows.WATSON COMPANYBalance SheetDecember 31, 12X1AssetsCashAccounts receivableFinished goods (575 units x $7.00)Direct materials (2,760 units x $0.50)Plant & equipmentLess: Accumulated depreciationTotal assetsLiabilities & Stockholders’ EquityAccounts payable to suppliersCommon stockRetained earningsTotal liabilities &. stockholders’ equity$4,59510,0004,0251,380$50,00010,00040,000$60,000$14,000$25,00021,00046,000$60,000The following information has been extracted from the firm’s accounting records:1. All sales are made on account at $20 per unit. Sixty percent of the sales are collected in the month of sale;the remaining 40% are collected in the following month. Forecasted sales for the first five months of20X2 are: January, 1,500 units,- February, 1,600 units; March, 1,800 units; April, 2,000 units; May, 2,100units.20.00 x 575 = 11,500 in sales for the month11,500 x 60% = 6900 collected4600 left for following month2. Management wants to maintain the finished goods inventory at 30% of the following month’s sales.30% of Jan = 450 unitesFeb = 480 unitesMarch = 540 unitesApril =600 unitesMay = 630 unites3. Watson uses four units of direct material in each finished unit. The direct material price has been stableand is expected to remain so over the next six months. Management wants to maintain the ending directmaterials inventory at 60% of the following month’s production needs.4. Seventy percent of all purchases are paid in the month of purchase; the remaining 30% are paid in thesubsequent month.5. Watson’s product requires 30 minutes of direct labor time. Each hour of direct labor costs $7.Instructions:a. Rounding computations to the nearest dollar, prepare the following for January through March:1) Sales budgetSales BudgetJan.SalesUnitesX sales price per unitestimated salesFeb.15002030,000March16002032,00018002036,0002) Schedule of cash collectionsCollectionsfrom current month salesfrom prior months salescash collections18,0004,60022,60019,20012,00031,20021,60012,80034,4003) Production budgetProduction budgetJanMonthly sales in unitPlanned ending finished goodsUnits neededLess beginning finished goodsProduction levelFeb15004801980-4501530March16005402140-480166018006002400-54018604) Direct material purchases budget & 5) Schedule of cash disbursements for material purchasesDirect Materials BudgetPurchasesScheduled ProductionX Raw materials per unittotal raw material needsplus: Target ending raw materialTotal units neededLess: Target beg. Raw materialRaw material purchasesX Estimated cost per unitCost of raw material purchasesJanFeb1530461203984101
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