Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Timpco, a retailer, makes both cash and credit sales (i.e., sales on open account). Information regarding budgeted sales for the last quarter of the year

Timpco, a retailer, makes both cash and credit sales (i.e., sales on open account). Information regarding budgeted sales for the last quarter of the year is as follows: October November December Cash sales $ 135,000 $ 111,000 $ 103,000 Credit sales 135,000 133,200 113,300 Total $ 270,000 $ 244,200 $ 216,300 Past experience shows that 5% of credit sales are uncollectible. Of the credit sales that are collectible, 60% are collected in the month of sale; the remaining 40% are collected in the month following the month of sale. Customers are granted a 1.5% discount for payment within 10 days of billing. Approximately 75% of collectible credit sales take advantage of the cash discount. Inventory purchases each month are 100% of the cost of the following months projected sales. (The gross profit rate for Timpco is approximately 30%.) All merchandise purchases are made on credit, with 20% paid in the month of purchase and the remainder paid in the following month. No cash discounts for early payment are available. Required: 1. Calculate the budgeted total cash receipts for November and December. (Round your final answers to the nearest whole dollar amount.) 2. Calculate budgeted cash disbursements for November and December (budgeted total sales for January of the coming year equals $202,000)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting And Auditing Research Tools And Strategies

Authors: Thomas R. Weirich, Thomas C. Pearson, Natalie Tatiana Churyk

7th Edition

9780470506974

More Books

Students also viewed these Accounting questions

Question

Define and discuss the nature of communication

Answered: 1 week ago

Question

Define and discuss the nature of culture

Answered: 1 week ago