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 $ 130,000 130,000 $ 260,000 November $ 107,000 128,400 $ 235,400 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. December $ 101,000 111,100 $ 212,100 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 available. Required: 1. Calculate the budgeted total cash receipts for November and December. (Round your final answers to the nearest whole dollar amount.) 1. Total cash receipts 2. Budgeted cash disbursements 2. Calculate budgeted cash disbursements for November and December (budgeted total sales for January of the coming year equals $199,000). 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 $ 130,000 130,000 $ 260,000 November $ 107,000 128,400 $ 235,400 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. December $ 101,000 111,100 $ 212,100 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 available. Required: 1. Calculate the budgeted total cash receipts for November and December. (Round your final answers to the nearest whole dollar amount.) 1. Total cash receipts 2. Budgeted cash disbursements 2. Calculate budgeted cash disbursements for November and December (budgeted total sales for January of the coming year equals $199,000). November December
Chapter7: Budgeting
Section: Chapter Questions
Problem 10PB: All Temps has a policy of always paying within the discount period, and each of its suppliers...
Related questions
Concept explainers
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.
Question
s
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
$ 130,000
130,000
$ 260,000
November
$ 107,000
128,400
$ 235,400
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.
December
$ 101,000
111,100
$ 212,100
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 available.
Required:
1. Calculate the budgeted total cash receipts for November and December. (Round your final answers to the nearest whole dollar
amount.)
1. Total cash receipts
2. Budgeted cash disbursements
2. Calculate budgeted cash disbursements for November and December (budgeted total sales for January of the coming year equals
$199,000).
November
December
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
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College