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Exercise 10-25: Budgeted Cash Receipts and Cash Payments Background 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 $100,000 $120,000 $80,000 Credit Sales $100,000 $150,000 $90,000 Total $200,000 $270,000 $170,000
Credit Sales Uncollectible 5% Of the collectibe credit sales: Collected in month of Sale 60% Collected following month 40% Discount for early payment 2% % of sales collected early 75% Inventory purchases as a % of cost 100% Gross profit rate 30% Inventory paid in month of purchase 25% Remainder paid following month 75% Requirements 1. Calculate the budgeted total cash receipts for November and December. ( Show your works) 2. Calculate budgeted cash payments for November and December. (Show your works) Budgeted sales for January of the coming year = $200,000 3JvdXBfn:G
1) Budgeted cash receiptsOctober November December January Cash Sales 100000 120000 80000 Credit sales ( A) 100000 150000 90000 200000 270000 170000 Uncollectible sales 5% of credit sales (…
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