Da 2Timpco, a retailer, makes both cash and credit sales (i.e., sales on open account). Information regarding budgeted sales for the lastquarter of the year is as follows:SkippedCash salesCredit salesTotalOctober$ 60,00060,000$ 120,000November$ 55,00066,000$ 121,000 $ 157,500December$ 75,00082,500Past experience shows that 5% of credit sales are uncollectible. Of the credit sales that are collectible, 60% are collected in the monthof sale; the remaining 40% are collected in the month following the month of sale. Customers are granted a 1.5% discount for paymentwithin 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 month's projected sales. (The gross profit rate for Timpco isapproximately 30%.) All merchandise purchases are made on credit, with 20% paid in the month of purchase and the remainder paid inthe 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 dollaramount.)1. Total cash receipts2. Budgeted cash disbursements2. Calculate budgeted cash disbursements for November and December (budgeted total sales for January of the coming year equals$160,000).NovemberDecember

Budgeting is a technique of estimating of future income and expenses. On the basis of such estimated…

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: Cash sales Credit sales Total October $ 60,000 60,000 $ 120,000 November $ 55,000 66,000 $ 121,000 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. December $ 75,000 82,500 $ 157,500 Inventory purchases each month are 100% of the cost of the following month's 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.) 1. Total cash receipts 2. Budgeted cash disbursements 2. Calculate budgeted cash disbursements for November and December (budgeted total sales for January of the coming year equals $160,000). November December

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter9: Profit Planning And Flexible Budgets

Section: Chapter Questions

Problem 45BEB: Pilsner Inc. purchases raw materials on account for use in production. The direct materials...