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It is expected sales will occur evenly throughout the year and that
there will be no cash sales. 75% of monthly sales
will be collected in the month following the sale, and the remaining
25% will be collected by the end of the second
month. No bad debts are anticipated.
2006 ACCOUNTS PAYABLE INFORMATION
This account represents the purchases for raw materials only. It is
expected that purchases will be made evenly throughout
the year, and that all purchases will be paid for during the month
following the purchase.
2006 WAGE AND SALARY INFORMATION
The accrued wage account will include all direct labor, indirect labor,
sales commissions and salaries, and administrative salaries. All wages
are earned evenly throughout the year, and employees are paid twice
each month. On December 31, 2006, the accrued wages will include
wages representing one full payroll period.
2006 ACCRUED OTHER INFORMATION
This account includes all other cash expenses not included in Account
Payable and Accrued Wages. It is the company's policy to pay all
other expenses during the month following the purchase. These
expenses will be incurred evenly throughout the year. The 20% fringe
benefits will be paid on all wages, salaries, and commissions.
2006 PROPERTY, PLANT AND EQUIPMENT INFORMATION
Property, plant and equipment consist of the following on December
31, 2005: