Paddu Company’s budgeted sales and direct materials purchases follow. January was the first month of operations.
Budgeted Sales:
January $139,000; February $191,000; March $253,000
Budgeted Direct Materials Purchases:
January $41,300; February $34,800; March $43,600
Paddu’s sales are 50% cash and 50% credit. It collects credit sales 50% in the month of sale, 50% in the month following the sale.
Paddu’s purchases are 40% cash and 60% on account. It pays purchases on account 40% in the month of purchase, and 60% in the month following purchase.
