Roque Company has been accumulating operating data in order to prepare an annual profit plan. Details regarding Roque’s sales for the first 6 months of the coming year are as follows: Forecasted sales January P600,000; February P650,000; March P700,000; April P625,000; May P720,000; June P800,000 Types of sales Cash sales 20% Credit sales 80% Collection Pattern for Credit Sales Month of sale 30% One month following sale 40% Second month following sales 25% Roque’s cost of goods sold averages 40% of the sales value. Roque’s objective is to maintain a target inventory equal to 30% of the next month’s sales in units. Purchases of merchandise for resale are paid for in the month following the sale. The variable operating expenses (other tan cost of goods sold) for Roque are 10% of sales and are paid for in the month following the sale. The annual fixed operating expenses are presented below. All of these are incurred uniformly throughout the year and paid monthly except for insurance and property taxes. Insurance is paid quarterly in January, April, July and October. Property taxes are paid twice a year in April and October. Advertising P720,000 Depreciation P420,000 Insurance P180,000 Property Taxes P240,000 Salaries P1,080,000
Roque Company has been accumulating operating data in order to prepare an annual profit plan.
Details regarding Roque’s sales for the first 6 months of the coming year are as follows:
The amount of cash collected in March for Roque Company from the sales made during March will be
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