10-26 Budgeted Cash Receipts and 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: \begin{tabular}{|l|r|r|r|r|} \hline & \multicolumn{3}{|c|}{ October dovember lecember } & January \\ \hline Cash sales & 105,000 & 87,000 & 91,000 & \\ \hline Credit sales & 110,000 & 150,000 & 102,000 & \\ \hline Total sales (\$) & 215,000 & 237,000 & 193,000 & 184,000 \\ \hline & & & & \\ \hline Collectible credit & & & & \\ \hline sales & 104,500 & 142,500 & 96,900 & \\ \hline \end{tabular} 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 sales. 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 payments are in effect. \begin{tabular}{|l|r|l|l|} \hline Uncollectible & 5% & Gross margii 30% \\ \hline Collection of the collectible credit sales: & 60% & \\ \hline \multicolumn{2}{|l|}{ In the month of sale } & 40% & Merchandise inventory payment schedule \\ \hline Next month & & This month 20% \\ \hline & 75% & Next month 80% \\ \hline Discount taken & 1.50% & & \\ \hline Discount amount & & \\ \hline \end{tabular} Req 1: Compute the total cash collected in November and December. Round all numbers to the nearest whole dollar. Req 2: Compute the total cash disbursements for inventory in November and December. Round all numbers to the nearest whole dollar. Budgeted Cash Disbursements \begin{tabular}{|l|l|r|r|} \hline \multicolumn{3}{|c|}{ October lovember )ecember } \\ \hline Sales & 105,000 & 87,000 & 91,000 \\ \hline COGS (70\% of sales) & & \\ \hline CGM ( 30% of sales) & & \\ \hline \end{tabular} \begin{tabular}{|} \hline January \\ \hline \\ \hline \\ \hline \\ \hline \end{tabular} Purchases made Payments This month Next month Total Cash Disbursements \begin{tabular}{|l|l|} \hline & \\ \hline & \\ \hline & \\ \hline \end{tabular}