The sales budget of Mulls Company for the fourth quarter of 20X6 is as follows:...
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Accounting
The sales budget of Mulls Company for the fourth quarter of 20X6 is as follows:
a) Compute the cash collections for December.
b) Compute the cash disbursements for purchases during December.
October NovemberDecember $91,000 $76,000 $108,000 Sales Sales are 20% cash, 80% credit. Cost of goods sold is 70%of total sales. Desired ending inventory for each month is equal to 25% of cost of goods sold for the following month. Collections on credit sales are as follows 50%in the month of sale 30%in the month following sale 15%in the second month following sale 5%uncollectible October 1 inventory is $16,000 Expected sales for January 20X7 are $84,000. Payments for inventory are 70% in the month following purchase and 30% two months following purchase
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