Cash collection $(16$ marks total$)$

The following is the sales budget for Transcanada Inc. for the first quarter of $20$x$1$:

January February March

Total sales $$205,000$ $$225,000$ $$248,000$

Credit sales are collected as follows: $75\%$ in the month of the sale, $20\%$ in the month after the sale, and $5\%$ in the second month after the sale.

The accounts receivable balance at the end of the previous quarter was $$89,000($$$59,000$ of which was uncollected December sales$).$

a$.$ Using what you know about the collection periods, calculate the sales for November, $(4$ marks$)$

b$.$ Using what you know about the collection periods, calculate the sales for December. $(4$ marks$)$

c$.$ Calculate the cash collections from sales for each month from January through March. $(8$ marks$)$

$10\mathrm{.}4$ Cash payments $(16$ marks total$)$

Karamazov Brothers Inc. has projected the following sales for the coming year$($s$)$:

Actual Projected

Q$4,20$x$1$ Q$1,20$x$2$ Q$2,20$x$2$ Q$3,20$x$2$ Q$4,20$x$2$ Q$5,20$x$3$

Total sales $$900$ $$900$ $$980$ $$940$ $$1,040$ $$990$

a$.$ Calculate payments to suppliers if Karamazov places orders during each quarter equal to $30\%$ of projected sales for the next quarter. Assume that Karamazov pays immediately. $(8$ marks$)$

b$.$ Calculate payments to suppliers assuming a $90-$day payables period. $(4$ marks$)$

c$.$ Calculate payment to suppliers assuming a $60-$day payables period. $(4$ marks$)$