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 $ 100,000 100,000 $ 200,000 November $ 120,000 150,000 $ 270,000 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. 1. 2. 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 25% paid in the month of purchase and the remainder paid in the following month. No cash discounts for early payment are in effect. December $ 80,000 90,000 $ 170,000 Required: 1. Calculate the budgeted total cash receipts for November and December. (Round your discount factor to 3 decimals places. Round your other intermediate calculations and the 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 $200,000). Total cash receipts Budgeted cash disbursements Answer is complete but not entirely correct. November December S $
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 $ 100,000 100,000 $ 200,000 November $ 120,000 150,000 $ 270,000 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. 1. 2. 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 25% paid in the month of purchase and the remainder paid in the following month. No cash discounts for early payment are in effect. December $ 80,000 90,000 $ 170,000 Required: 1. Calculate the budgeted total cash receipts for November and December. (Round your discount factor to 3 decimals places. Round your other intermediate calculations and the 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 $200,000). Total cash receipts Budgeted cash disbursements Answer is complete but not entirely correct. November December S $
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: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
November
$ 100,000
100,000
$ 120,000
150,000
$ 200,000 $ 270,000
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 25% paid in the month of purchase and the remainder paid in
the following month. No cash discounts for early payment are in effect.
1.
2.
Required:
1. Calculate the budgeted total cash receipts for November and December. (Round your discount factor to 3 decimals places. Round
your other intermediate calculations and the 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
$200,000).
December
$ 80,000
90,000
$ 170,000
> Answer is complete but not entirely correct.
November
December
Total cash receipts
Budgeted cash disbursements
I$
$
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