Cash sales Nov 21 Act Credit sales Dec 21 Bud $80,000 $100,000 $60,000 $240,000 $360,000 $180,000 Total Sales $320,000 $460,000 $240,000 Management estimates 5% of credit sales to be uncollectible. Of collectible credit sales, 60% is collected in the month of sale. Purchases of inventory each month include 70% of the next month's projected total sales (stated at cost) plus 30% of projected sales for the current month (stated at cost). All inventory purchases are on account; 25% is paid in the month of purchase, and the remainder is paid in the month following the month of purchase. Purchase costs are approximately 60% of the selling price. Budgeted total cash payments in December 2021 for inventory purchases is? Jan 22 Bud
Cash sales Nov 21 Act Credit sales Dec 21 Bud $80,000 $100,000 $60,000 $240,000 $360,000 $180,000 Total Sales $320,000 $460,000 $240,000 Management estimates 5% of credit sales to be uncollectible. Of collectible credit sales, 60% is collected in the month of sale. Purchases of inventory each month include 70% of the next month's projected total sales (stated at cost) plus 30% of projected sales for the current month (stated at cost). All inventory purchases are on account; 25% is paid in the month of purchase, and the remainder is paid in the month following the month of purchase. Purchase costs are approximately 60% of the selling price. Budgeted total cash payments in December 2021 for inventory purchases is? Jan 22 Bud
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
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Transcribed Image Text:Cash sales
Credit sales
Nov 21 Act
$80,000
$100,000
$60,000
$240,000
$360,000
$180,000
$320,000
$460,000
$240,000
Management estimates 5% of credit sales to be uncollectible. Of collectible credit sales,
60% is collected in the month of sale. Purchases of inventory each month include 70% of
the next month's projected total sales (stated at cost) plus 30% of projected sales for the
current month (stated at cost). All inventory purchases are on account; 25% is paid in the
month of purchase, and the remainder is paid in the month following the month of
purchase. Purchase costs are approximately 60% of the selling price.
Budgeted total cash payments in December 2021 for inventory purchases is?
Total Sales
Dec 21 Bud
Jan 22 Bud
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