Badlands, Inc. manufactures a household fan that sells for $20per unit. All sales are on account, with 45 percent of salescollected in the month of sale and 55 percent collected in thefollowing month. The data that follow were extracted from thecompany’s accounting records.
- Badlands maintains a minimum cash balance of $30,000. Totalpayments in January 20x1 are budgeted at $205,000.
- A schedule of cash collections for January and February of 20x1revealed the following receipts for the period:
| Cash Receipts |
| January | February |
| From December 31 accounts receivable | $ | 110,000 | | | | |
| From January sales | | 96,000 | | $ | 154,000 | |
| From February sales | | | | | 64,800 | |
|
- March 20x1 sales are expected to total 11,000 units.
- Finished-goods inventories are maintained at 20 percent of thefollowing month’s sales.
- The December 31, 20x0, balance sheet revealed the followingselected figures: cash, $24,500; accounts receivable, $110,000; andfinished goods, $25,350.
Required:
Determine the number of units that Badlands sold in December20x0.
Compute the sales revenue for March 20x1.
Compute the total sales revenue to be reported on Badlands’budgeted income statement for the first quarter of 20x1.
Determine the accounts receivable balance to be reported on theMarch 31, 20x1, budgeted balance sheet.
Calculate the number of units in the December 31, 20x0,finished-goods inventory.
Calculate the number of units of finished goods to bemanufactured in January 20x1.
Calculate the financing required in January, if any, to maintainthe firm’s minimum cash balance.
