Question
nformation pertaining to Noskey Corporations sales revenue follows: November 2018 (Actual) December 2018 (Budgeted) January 2019 (Budgeted) Cash sales $ 180,000 $ 160,000 $ 100,000
nformation pertaining to Noskey Corporations sales revenue follows:
November 2018 (Actual) | December 2018 (Budgeted) | January 2019 (Budgeted) | ||||||||||
Cash sales | $ | 180,000 | $ | 160,000 | $ | 100,000 | ||||||
Credit sales | 360,000 | 500,000 | 260,000 | |||||||||
Total sales | $ | 540,000 | $ | 660,000 | $ | 360,000 | ||||||
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.
Required:
Determine for Noskey:
1. Budgeted cash collections in December 2018 from November 2018 credit sales.
2. Budgeted total cash receipts in January 2019
*the question gives the following layout:
January 2019
Cash sales in January
Collections from credit sales in January:
Total collectible from credit sales
Percentage to be collected in January
Collections from credit sales in December:
Total collectible from credit sales
Percentage to be collected in January
Budgeted total cash receipts in January
3. Budgeted total cash payments in December 2018 for inventory purchases.
*layout given in problem:
Total inventory purchases in November:
For November Sales:
For December Sales:
Percentage of November purchases to be paid in December:
Payment in December for purchases in November:
Budgeted purchases in December:
For December sales:
For January sales:
Percentage of December purchases to be paid in December
Payment in December for purchases in December
Budgeted cash payment in December for inventory purchases
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