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 $53. 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 596 Sales forecasts are as follows: September 140 units 250 units November 380 units December 480 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. October Your answer is partially correct. Try again. 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 140 Units sold 250 380 480 Mar 1 Cash sales 2671 4770 7250 9158 Credit card sales 2114 3776 5739 7250 1113 1987 3021 3816 One month later Two months later 0 445 795 1208 1526 Three months later 296 530 805 1017 Total 4785 9659 15421 20520 5554 2331 1017 Cash Disbursements Sept Oct Nov Dec Jan 1 Units sold 1401 250 380 480 Purchases Desired ending inventory 175 266 336 140 250 380 480 50 175 266 336 Units sold this month Less Beginning inventory Budgeted purchases V Cash Disbursements: 265 341 450 144 Paid same month 7971 T Paid next month 1600 8480 5456 7200 2304 Total 1600 137141 2304 Summary of Budgeted Cash Receipts and Disbursements Sept Oct Nov Dec Jan Feb Mar 4785 9659) Cash receipts 15421 20520 5554 2331 1017 Cash disbursements 9480 W 1600 5456 7200 2304 3185 1179 9965 TT 13320 3250 2331 1071 Net cash flow 3185 4364 14329 276494 30899 35560 36631 Cumulative cash flow Brad will need finance purchases during the month of TOctober V SHOW SOLUTION SHOW