The controller of Wildhorse Company estimates sales and production for the first four months of 2022 as follows: Sales Production in units January $28,300 900 February March $38,300 $48,400 1,600 2,000 April $23,400 2,300 Sales are 40% cash and 60% on account, and 60% of credit sales are collected in the month of the sale. In the month after the sale, 40% of credit sales are collected. It takes 4 kg of direct materials to produce a finished unit, and direct materials cost $5 per kg. All direct materials purchases are on account, and are paid as follows: 40% in the month of the purchase and 60% the following month. Ending direct materials inventory for each month is 40% of the next month's production needs. January's beginning materials inventory is 1,150 kg. Suppose that both accounts receivable and accounts payable are zero at the beginning of January.
The controller of Wildhorse Company estimates sales and production for the first four months of 2022 as follows: Sales Production in units January $28,300 900 February March $38,300 $48,400 1,600 2,000 April $23,400 2,300 Sales are 40% cash and 60% on account, and 60% of credit sales are collected in the month of the sale. In the month after the sale, 40% of credit sales are collected. It takes 4 kg of direct materials to produce a finished unit, and direct materials cost $5 per kg. All direct materials purchases are on account, and are paid as follows: 40% in the month of the purchase and 60% the following month. Ending direct materials inventory for each month is 40% of the next month's production needs. January's beginning materials inventory is 1,150 kg. Suppose that both accounts receivable and accounts payable are zero at the beginning of January.
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:What is the change in the cash balance for the period January-March?
Cash balance change
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Transcribed Image Text:The controller of Wildhorse Company estimates sales and production for the first four months of 2022 as follows:
Sales
Production in units
January
$28,300
900
February March
$38,300
1,600
April
$48,400 $23,400
2,000
2,300
Sales are 40% cash and 60% on account, and 60% of credit sales are collected in the month of the sale. In the month after
the sale, 40% of credit sales are collected. It takes 4 kg of direct materials to produce a finished unit, and direct materials
cost $5 per kg. All direct materials purchases are on account, and are paid as follows: 40% in the month of the purchase and
60% the following month. Ending direct materials inventory for each month is 40% of the next month's production needs.
January's beginning materials inventory is 1,150 kg. Suppose that both accounts receivable and accounts payable are zero
at the beginning of January.
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