Information pertaining to Noskey Corporation's sales revenue follows: November 2021 (Actual) $ 110,000 276,000 $386,000 December 2021 (Budgeted) $ 118,000 402,000 $ 520,000 Cash sales Credit sales Total sales January 2022 (Budgeted) $ 72,000 204,000 $ 276,000 Management estimates 5% of credit sales to be uncollectible. Of collectible credit sales, 60% is collected in the month of sale and the remainder in the month following 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. Required: Determine for Noskey: 1. Budgeted cash collections in December 2021 from November 2021 credit sales. 2. Budgeted total cash receipts in January 2022. 3. Budgeted total cash payments in December 2021 for inventory purchases.
Information pertaining to Noskey Corporation's sales revenue follows: November 2021 (Actual) $ 110,000 276,000 $386,000 December 2021 (Budgeted) $ 118,000 402,000 $ 520,000 Cash sales Credit sales Total sales January 2022 (Budgeted) $ 72,000 204,000 $ 276,000 Management estimates 5% of credit sales to be uncollectible. Of collectible credit sales, 60% is collected in the month of sale and the remainder in the month following 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. Required: Determine for Noskey: 1. Budgeted cash collections in December 2021 from November 2021 credit sales. 2. Budgeted total cash receipts in January 2022. 3. Budgeted total cash payments in December 2021 for inventory purchases.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
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Transcribed Image Text:Information pertaining to Noskey Corporation's sales revenue follows:
November 2021
(Actual)
$ 110,000
276,000
$ 386,000
December 2021
(Budgeted)
$ 118,000
402,000
$ 520,000
Cash sales
Credit sales
Total sales
COMPE
Management estimates 5% of credit sales to be uncollectible. Of collectible credit sales, 60% is collected in the month of sale and the
the next month's projected
remainder in the month following the month of sale. Purchases of inventory each month include 70%
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.
Required:
Determine for Noskey:
January 2022
(Budgeted)
$ 72,000
204,000
$ 276,000
1. Budgeted cash collections in December 2021 from November 2021 credit sales.
2. Budgeted total cash receipts in January 2022.
3. Budgeted total cash payments in December 2021 for inventory purchases.
Complete this question by entering your answers in the tabs below.
Required 1 Required 2 Required 3
Budgeted cash collections in December 2021 from November 2021 credit sales.
Budgeted collections in December from November credit sales
< Required 1
Required 2
>
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