Question - Paddu Company's budgeted sales and direct materials purchases follow. January was the first month of operations.
Budgeted Sales: January $140,000; February $190,000; March $250,000
Budgeted Direct Materials Purchases: January $40,000; February $35,000; March $40,000
Paddu's sales are 35% cash and 65% credit. It collects credit sales 40% in the month of sale, 60% in the month following the sale. Paddu's purchases are 40% cash and 60% on account. It pays purchases on account 60% in the month of purchase, and 40% in the month following purchase.
a. We expect a schedule of expected collections for January, February, and March.
b. We expect schedule of expected payments for direct materials for January, February and March.