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The company is in the process of preparing a budget for October and assembled the following data: Sales are budgeted at $ 3 4 0

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The company is in the process of preparing a budget for October and assembled the following data:
Sales are budgeted at $340,000 for October and $350,000 for November. Of these sales, 35% will be for cash; the remainder will be credit sales. Forty percent of a month's credit sales are collected in the month the sales are made, and the remaining 60% are collected in the following month. All of the September 30 accounts recelvable will be collected in October.
2 The budgeted cost of goods sold is always 45% of sales and the ending merchandise inventory is always 30% of the following month's cost of goods sold.
All merchandise purchases are on account. Thirty percent of all purchases are pald for in the month of purchase and 70% are pard for in the following month. All of the September 30 accounts payable to suppliers will be pald during October.
Selling and administrative expenses for October are budgeted at $83,000, exclusive of depreciation. These expenses will be paid in cash. Depreciation is budgeted at $2,70 for the month.
Begulred:
Using the information provided, calculate or prepare the following for October:
a. The budgeted cash collections.
b. The budgeted merchandise purchases.
c. The budgeted cash disbursements for merchandise purchases.
d. The budgeted net operating income.
e. An-end-of-month budgeted balance sheet.
2 Assume the following changes to the underlying budgeting assumptions:
50% of a month's credit sales are collected in the month the sales are made and the remaining 50% are collected in the tollowing month
2 The ending merchandise inventory is always 10% of the following month's cost of goods sold
20% of all purchases are pard for in the month of purchase and 80% are pald for in the following month.
Using these new assumptions, calculate or prepare the following for october:
a. The budgeted cash collections.
b. The budgeted merchandise purchases.
c. The budgeted cash disbursements for merchandise purchases.
d. Net operating income.
e. An end-of-month budgeted balance sheet.
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