Information pertaining to Noskey Corporations sales revenue follows: November 2015 (actual) December 2015 (actual) January 2016 (actual) Cash Sales $80,000 $100,000 $60,000 Credit Sales $240,000
Information pertaining to Noskey Corporations sales revenue follows:
November 2015 (actual) | December 2015 (actual) | January 2016 (actual) | |
---|---|---|---|
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 5% of credit sales to be uncollectible. Of collectible credit sales, 60% is collected in the month of sale and the remainder in the month following the month of sale. Purchases of inventory each month include 70% of the next months projected total sales (stated at cost) plus 30% of projected sales for the current month (stated at cost). All inventory purchases are on account; 25% is paid in the month of purchase, and the remainder is paid in the month following the month of purchase. Purchase costs are approximately 60% of the selling price.
Determine for Noskey and explain the math:
1. Budgeted cash collections in December 2015 from November 2015 credit sales.
2. Budgeted total cash receipts in January 2016.
3. Budgeted total cash payments in December 2015 for inventory purchases.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started