Exercise 10.44 A university student, Brad Worth, plans to sell atomic alarm clocks with CD players over the Internet and by mail order to help pay his expenses during the fall semester. He buys the clocks for $32 and sells them for $52. If payment by cheque accompanies the mail orders (estimated to be 40% of sales), he gives a 10% discount. If customers include a credit card number for either Internet or mail order sales (30% of sales), customers receive a 5% discount. The collections are estimated: One month following 15% Two months following 6% Three months following 4% Uncollectible 5% Sales forecasts are as follows: September 100 units October 200 units November 300 units December 430 units January out of the business Brad plans to pay his supplier 50% in the month of purchase and 50% in the following month. A 6% discount is granted on payments made in the month of purchase; however, he will not be able to take any discounts on September purchases because of cash flow constraints. All September purchases will be paid for in October. He has 50 clocks on hand (purchased in August and to be paid for in September) and plans to maintain enough end-of-month inventory to meet 70% of the next month's sales. Prepare schedules for monthly budgeted cash receipts and cash disbursements for this venture. During which months will Brad need to finance purchases? (Round all entries to whole amounts.) Cash Receipts Sept Oct Nov Dec Jan Feb Mar 100 Units sold 200 300 430 Cash sales 1872 3744 5616 8049.6 Credit card sales 1482 2964 4446 6372.6 One month later 780 1560 2340 3354 Two months later 312 624 936 1341.6 Three months later 0 208 416 624 894.4 Total 3354 7488 11934 17594.2 4706 1965.6 894.4 Cash Disbursements Sept Oct Nov Dec Jan TUnits sold 100 200 300 430 Purchases M Desired ending inventory 140 210 301 TUnits sold this month 100 200 300 430 50 140 210 301 TLess T Beginning inventory Budgeted purchases X x Cash Disbursements: T Paid same month Paid next month Total Summary of Budgeted Cash Receipts and Disbursements Sept Oct Nov Dec Jan Feb Mar $ $ X 7488 3354) su 11934 Cash receipts 4706 17594.2 1965.6 894.4 X X Cash disbursements 1600 10399.97 10575.97 8319.97 2064 $ x X 1754 -2911.97 1358.03 9274.23 2642 1956.6 894.4 Net cash flow $ $ $ X X Cumulative cash flow 1754 -1157.97 200.06 12116.29 14081.89 14976.29 Brad will need to finance purchases during the month of October LINK TO TEXT X Your answer is incorrect. Try again. Brad planned simply to write off the uncollectibles. However, his accounting professor suggested that he turn them over to a collection agency. How much could Brad let the collection agency keep so that he would be no worse off? (Round answer to 0 decimal places, e.g. 125.) Amount of uncollectibles 3354