impco, a retailer, makes both cash and credit sales (i.e., saleson open account). Information regarding budgeted sales for the lastquarter of the year is as follows: October November December Cashsales $ 140,000 $ 115,000 $ 105,000 Credit sales 140,000 138,000115,500 Total $ 280,000 $ 253,000 $ 220,500 Past experience showsthat 5% of credit sales are uncollectible. Of the credit sales thatare collectible, 60% are collected in the month of sale; theremaining 40% are collected in the month following the month ofsale. Customers are granted a 1.5% discount for payment within 10days of billing. Approximately 75% of collectible credit sales takeadvantage of the cash discount. Inventory purchases each month are100% of the cost of the following month’s projected sales. (Thegross profit rate for Timpco is approximately 30%.) All merchandisepurchases are made on credit, with 20% paid in the month ofpurchase and the remainder paid in the following month. No cashdiscounts for early payment are in effect. Required: 1. Calculatethe budgeted total cash receipts for November and December. (Roundyour intermediate calculations and final answers to the nearestwhole dollar amount.) 2. Calculate budgeted cash disbursements forNovember and December (budgeted total sales for January of thecoming year equals $205,000).
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| | | November | December | | 1. | Total cash receipts | | | | 2. | Budgeted cashdisbursements | | |
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