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: October $ 155, 000 155, 000 $ 310, 000 November $ 127, 000 December $ 111, 000 Cash sales Credit sales 152, 400 122, 100 Total $ 279, 400 $ 233, 100 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 $214,000). November December 271,128 Os 32,634 XS 237,075 160,496 1. Total cash receipts 2 Budgeted cash disbursements
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: October $ 155, 000 155, 000 $ 310, 000 November $ 127, 000 December $ 111, 000 Cash sales Credit sales 152, 400 122, 100 Total $ 279, 400 $ 233, 100 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 $214,000). November December 271,128 Os 32,634 XS 237,075 160,496 1. Total cash receipts 2 Budgeted cash disbursements
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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:
November
$ 127, 000
152, 400
December
$ 111, 000
122, 100
October
Cash sales
$ 155, 000
Credit sales
155, 000
Total
$ 310, 000
$ 279, 400
$ 233, 100
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
$214,000).
November
December
1.
Total cash receipts
271,128 O $
237,075O
2.
Budgeted cash disbursements
32,634
160,496
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