Reference no: EM132254682

Question - 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	$155,000	$127,000	$111,000
Credit sales	155,000	152,400	122,100
Total	$310,000	$279,400	$233,100

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.

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 in effect.

Required -

1. Calculate the budgeted total cash receipts for November and December.

2. Calculate budgeted cash disbursements for November and December (budgeted total sales for January of the coming year equals $214,000).