Delhi, Inc., seeks your assistance in developing cash and other budget information for August, September, and October.
Question:
¢ Each months sales are billed on the last day of the month.
¢ Customers are allowed a 3 percent discount if payment is made within 10 days after the billing date. Receivables are recorded in the accounts at their gross amounts (not net of discounts).
¢ The billings are collected as follows: 60 percent within the discount period, 25 percent by the end of the month, and 9 percent by the end of the following month. Six percent is uncollectible.
Purchase data are as follows.
¢ Of all purchases of merchandise and selling, general, and administrative expenses, 54 percent is paid in the month purchased and the remainder in the following month.
¢ The number of units in each months ending inventory equals 130 percent of the next months units of sales.
¢ The cost of each unit of inventory is $20.
¢ Selling, general, and administrative expenses, of which $8,000 is depreciation, equal 15 percent of the current months sales.
¢ Actual and projected sales follow:
Required
Compute the following:
a. Budgeted purchases in dollars for August.
b. Budgeted purchases in dollars for September.
c. Budgeted cash collections during August.
d. Budgeted cash disbursements during September.
e. The budgeted number of units of inventory to be purchased duringOctober.
The ending inventory is the amount of inventory that a business is required to present on its balance sheet. It can be calculated using the ending inventory formula Ending Inventory Formula =... Accounts Payable
Accounts payable (AP) are bills to be paid as part of the normal course of business.This is a standard accounting term, one of the most common liabilities, which normally appears in the balance sheet listing of liabilities. Businesses receive... Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...
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Related Book For
Fundamentals of Cost Accounting
ISBN: 978-0077398194
3rd Edition
Authors: William Lanen, Shannon Anderson, Michael Maher
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