1. Total cash receipts 2. Budgeted cash disbursements November December Timpco, a retailer, makes both cash and credit sales (i.e., sales on open account). Information regarding budgeted sales for the last quarter of the year is as follows: Cash sales Credit sales Total October $ 120,000 120,000 $ 240,000 November $ 99,000 118,800 $ 217,800 December $ 97,000 106,700 $ 203,700 Past experience shows that 5% of credit sales are uncollectible. Of the credit sales that are collectible, 60% are collected in the month of sale; the remaining 40% are collected in the month following the month of sale. Customers are granted a 1.5% discount for payment within 10 days of billing. Approximately 75% of collectible credit sales take advantage of the cash discount. Inventory purchases each month are 100% of the cost of the following month's projected sales. (The gross profit rate for Timpco is approximately 30%.) All merchandise purchases are made on credit, with 20% paid in the month of purchase and the remainder paid in the following month. No cash discounts for early payment are in effect. Required: 1. Calculate the budgeted total cash receipts for November and December. (Round your intermediate calculations and final answers to the nearest whole dollar amount.) 2. Calculate budgeted cash disbursements for November and December (budgeted total sales for January of the coming year equals $193,000).
1. Total cash receipts 2. Budgeted cash disbursements November December Timpco, a retailer, makes both cash and credit sales (i.e., sales on open account). Information regarding budgeted sales for the last quarter of the year is as follows: Cash sales Credit sales Total October $ 120,000 120,000 $ 240,000 November $ 99,000 118,800 $ 217,800 December $ 97,000 106,700 $ 203,700 Past experience shows that 5% of credit sales are uncollectible. Of the credit sales that are collectible, 60% are collected in the month of sale; the remaining 40% are collected in the month following the month of sale. Customers are granted a 1.5% discount for payment within 10 days of billing. Approximately 75% of collectible credit sales take advantage of the cash discount. Inventory purchases each month are 100% of the cost of the following month's projected sales. (The gross profit rate for Timpco is approximately 30%.) All merchandise purchases are made on credit, with 20% paid in the month of purchase and the remainder paid in the following month. No cash discounts for early payment are in effect. Required: 1. Calculate the budgeted total cash receipts for November and December. (Round your intermediate calculations and final answers to the nearest whole dollar amount.) 2. Calculate budgeted cash disbursements for November and December (budgeted total sales for January of the coming year equals $193,000).
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Transcribed Image Text:1. Total cash receipts
2.
Budgeted cash disbursements
November
December
Transcribed Image Text:Timpco, a retailer, makes both cash and credit sales (i.e., sales on open account). Information regarding budgeted sales for the last
quarter of the year is as follows:
Cash sales
Credit sales
Total
October
$ 120,000
120,000
$ 240,000
November
$ 99,000
118,800
$ 217,800
December
$ 97,000
106,700
$ 203,700
Past experience shows that 5% of credit sales are uncollectible. Of the credit sales that are collectible, 60% are collected in the
month of sale; the remaining 40% are collected in the month following the month of sale. Customers are granted a 1.5% discount for
payment within 10 days of billing. Approximately 75% of collectible credit sales take advantage of the cash discount.
Inventory purchases each month are 100% of the cost of the following month's projected sales. (The gross profit rate for Timpco is
approximately 30%.) All merchandise purchases are made on credit, with 20% paid in the month of purchase and the remainder paid
in the following month. No cash discounts for early payment are in effect.
Required:
1. Calculate the budgeted total cash receipts for November and December. (Round your intermediate calculations and final
answers to the nearest whole dollar amount.)
2. Calculate budgeted cash disbursements for November and December (budgeted total sales for January of the coming year
equals $193,000).
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