formation per Cash sales Credit sales Total sales November $ 112,000 304,000 $ 416,000 on's sales revenue is presented be December $ 141,000 466,000 $ 607,000 January $ 94,000 250,000 $ 344,000 Management estimates that 5% of credit sales are eventually uncollectible. Of the collectible credit sales, 60% are likely to be collected in the month of sale and the remainder in the month following the month of sale. The company desires to begin each month with an inventory equal to 70% of the sales projected for the month. All purchases of inventory are on open account: 20% will be paid in the month of purchase, and the remainder paid in the mom following the month of purchase. Purchase costs are approximately 50% of the selling prices. Budgeted December cash payments by Collection Corporation for December inventory purchases are:
formation per Cash sales Credit sales Total sales November $ 112,000 304,000 $ 416,000 on's sales revenue is presented be December $ 141,000 466,000 $ 607,000 January $ 94,000 250,000 $ 344,000 Management estimates that 5% of credit sales are eventually uncollectible. Of the collectible credit sales, 60% are likely to be collected in the month of sale and the remainder in the month following the month of sale. The company desires to begin each month with an inventory equal to 70% of the sales projected for the month. All purchases of inventory are on open account: 20% will be paid in the month of purchase, and the remainder paid in the mom following the month of purchase. Purchase costs are approximately 50% of the selling prices. Budgeted December cash payments by Collection Corporation for December inventory purchases are:
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Do not give answer in image
Transcribed Image Text:Information pertaining to Collection Corporation's sales revenue is presented below:
Cash sales
Credit sales
Total sales
Multiple Choice
$281,080.
Management estimates that 5% of credit sales are eventually uncollectible. Of the collectible credit sales, 60% are likely to be collected in the month of
sale and the remainder in the month following the month of sale. The company desires to begin each month with an inventory equal to 70% of the sales
projected for the month. All purchases of inventory are on open account; 20% will be paid in the month of purchase, and the remainder paid in the month
following the month of purchase. Purchase costs are approximately 50% of the selling prices.
Budgeted December cash payments by Collection Corporation for December inventory purchases are:
$169,160,
November
$ 112,000
304,000
$ 416,000
$60,700
December
$ 141,000
466,000
$ 607,000
January
$ 94,000
250,000
$ 344,000
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education