Credit sales

by | Sep 4, 2021 | Assignment Help

 Timpco, 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: October November DecemberCash sales $ 115,000 $ 95,000 $ 95,000Credit sales 115,000 114,000 104,500Total S 230,000 $ 209,000 $ 199,500 ‘— Past experience shows that 5% of credit sales are uncollectible. Of the credit sales that are collectible, 60% are collected in themonth of sale; the remaining 40% are collected in the month following the month of sale. Customers are granted a 1.5% discountfor 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 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 remainderpaid in the following month. No cash discounts for early payment are in effect. Required: 1. Calculate the budgeted total cash receipts for November and December. (Round your intermediate calculations and finalanswers to the nearest whole dollar amount.) 2. Calculate budgeted cash disbursements for November and December (budgeted total sales for January of the coming yearequals $190,000). 1. Total cash receipts 2. Budgeted cash disbursements

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