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Parliament Company, which expects to start operations on January 1, year 2, will sell digital cameras in shopping malls. Parliament has budgeted sales as indicated in the following table. The company expects a 10 percent increase in sales per month for February and March. The ratio of cash sales to sales on account will remain stable from January through March.

Required:
Determine the amount of sales revenue Parliament will report on its first quarter pro forma income statement.

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Tundexi

Answer:

Note: The complete question is attached as picture below

We are add the previous month +10% to get that month's amounts

                              Sales Budget

                       January     February    March

Cash sales      $50,000   $55,000    $60,500

Credit sales    $120,000  $132,000  $145,200

Total sales      $170,000 $187,000  $205,700

Workings:

February

Cash sales = 50,000+(50,000*10%) = $55,000

Credit sales= 120,000+(120,000*10%) = $132,000

March

Cash sales = 55,000+(55,000*10%) = $60,500

Credit sales= 132,000+(132,000*10%) = $145,200

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  • The amount of sales revenue Parliament will report on its first-quarter pro forma income statement is to be presented below:

Here we have added the  previous month +10% to get that month's amounts

So,

                             Sales Budget  

                      January     February    March

Cash sales      $50,000   $55,000    $60,500

Credit sales    $120,000  $132,000  $145,200

Total sales      $170,000 $187,000  $205,700

Workings note

  • For February

Cash sales = 50,000 + (50,000 ×10%)

= $55,000

Credit sales= 120,000+(120,000 × 10%)

= $132,000

  • For March

Cash sales = 55,000+(55,000 × 10%)

= $60,500

Credit sales= 132,000+(132,000 × 10%)

= $145,200

In this way, the amount should be determined.

Learn more: brainly.com/question/13549064

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