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 $ 70,000 70,000 $ 140,000 November $ 63,000 75,600 $ 138,600 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 available. December $ 79,000 86,900 $ 165,900 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 $166,000). $ $ November 131,647 $ 23,226 $ December 156,087 116,144

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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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
$70,000
70,000
$ 140,000
November
$ 63,000
75,600
$ 138,600
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 available.
December
$ 79,000
86,900
$ 165,900
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 $166,000).
$
$
November
131,647 $
23,226 $
December
156,087
116,144
Transcribed Image Text:2 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 $70,000 70,000 $ 140,000 November $ 63,000 75,600 $ 138,600 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 available. December $ 79,000 86,900 $ 165,900 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 $166,000). $ $ November 131,647 $ 23,226 $ December 156,087 116,144
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