Information pertaining to Noskey Corporation’s sales revenue follows:

November 2000 December 2000 January 2001

(Actual) (Actual) (Budgeted)

Cash sales $ 80,000 $100,000 $ 60,000 Credit sales 240,000 360,000 180,000 Total sales $320,000 $460,000 $240,000 Management estimates that 5 percent of credit sales are uncollectible. Of the credit sales that are collectible, 60 percent are collected in the month of sale and the remainder in the month following the sale. Purchases of inventory each month are 70 percent of the next month’s projected total sales. All purchases of inventory are on account; 25 percent are paid in the month of purchase, and the remainder are paid in the month following the purchase.

Required:

1. What are Noskey’s budgeted cash collections in December 1999 from November 2000 credit sales?

2. What are total budgeted cash receipts in January 2001?

3. What is Noskey budgeting for total cash payments in December 2000 for inventory purchases? (CMA adapted) lp6