Question

Walton Company, which expects to start operations on January 1, year 2, will sell digital cameras in shopping malls. Walton has budgeted sales as indicated in the following table. The company expects a 12 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:
a. Complete the sales budget by filling in the missing amounts.
b. Determine the amount of sales revenue Walton will report on its first quarter pro forma income statement.

Answer 1

To complete the sales budget, calculate the sales for February and March and determine the sales revenue Walton will report on its first-quarter pro forma income statement.

Step-by-step explanation:

To complete the sales budget, we need to calculate the sales for February and March, and determine the amount of sales revenue Walton will report on its first-quarter pro forma income statement.

a. Let's first calculate the sales for February and March. To do this, we'll use the given sales for January as a starting point. We can then apply the 12 percent increase in sales per month for February and March. Here's the calculation:

• February sales = January sales + (January sales * 12%)
• March sales = February sales + (February sales * 12%)

b. To determine the amount of sales revenue Walton will report on its first-quarter pro forma income statement, we need to sum up the sales for January, February, and March. Here's the calculation:

• Total sales revenue = January sales + February sales + March sales