Kids Clothing NZ Ltd makes both cash and credit sales. The company’s information regarding budgeted sales for the last quarter of the year is as follows: October November December Cash

Kids Clothing NZ Ltd makes both cash and credit sales. The company’s information regarding budgeted sales for the last quarter of the year is as follows: October November December Cash sales $100,000 $120,000 $ 80,000 Credit sales 100,000 150,000 90,000 Total $200,000 $270,000 $170,000 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. Inventory purchases each month are 100% of the cost of the following month’s projected sales. (The gross profit rate for Kids Clothing is approximately 30%.) All merchandise purchases are made on credit, with 25% 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. 2. Calculate budgeted cash disbursements for November and December (budgeted total sales for January of the coming year equals $200,000).

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