AE10-11 Budgeted Sales and Cash Receipts [LO 2] The Warrenburg Antique Mall budg

Question

AE10-11

Budgeted Sales and Cash Receipts [LO 2]
The Warrenburg Antique Mall budgeted credit sales in the first quarter of 2012 to be as follows:


January $180,000
February 191,000
March 205,000

Credit sales in December 2011 are expected to be $248,000. The company expects to collect 79 percent of a month’s sales in the month of sale and 21 percent in the following month.


Estimate cash receipts for each month of the first quarter of 2012.


January February March
Collection of credit sales
Collection of December sales $_______
Collection of January sales
Collection of January sales $ __________
Collection of February sales ___________
Collection of February sales $___________
Collection of March sales
$ _________      Jan
$ _________      Feb
$ __________    March

Cash Disbursements for Purchases [LO
2]

Mississippi Retailers expects to make inventory purchases in the
next quarter as follows:

Prior experience has shown
that 30 percent of a month’s purchases are paid in the month of purchase and 70
percent are paid in the month following purchase. March purchases were $50,000.

Estimate cash disbursements related to purchases for April, May,
and June.

$

$

$

Explanation / Answer

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