Delhi, Inc., seeks your assistance in developing cash and other budget informati

Question

Delhi, Inc., seeks your assistance in developing cash and other budget information for August, September, and October. At July 31, the company had cash of $10,000, accounts receivable of $863,000, inventories of $670,670, and accounts payable of $203,883. The budget is to be based on the following assumptions. Each month's 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: 65 percent within the discount period, 20 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, 49 percent is paid in the month purchased and the remainder in the following month. The number of units in each month's ending inventory equals 130 percent of the next month's units of sales. The cost of each unit of inventory is $11. Selling, general, and administrative expenses, of which $5,000 is depreciation, equal 20 percent of the current month's sales. Actual and projected sales follow: Compute the Budgeted purchases in dollars for August. Compute the Budgeted purchases in dollars for September. Compute the Budgeted cash collections during August. (Round your intermediate calculations and final answer to nearest dollar amount.) Compute the Budgeted cash disbursements during September. (Round your intermediate calculations and final answer to nearest dollar amount.) Compute the budgeted number of units of inventory to be purchased during October.

Explanation / Answer

Working June July August September October November Sales in Units 46600 48100 46900 45400 47300 48700 (+) Ending Inventory 62530 60970 59020 61490 63310 (-) Beginning inventory 62530 60970 59020 61490 Purchases 46540 44950 47870 49120 Sales in $                745,600.00                769,600.00    750,400.00             726,400.00        756,800.00       779,200.00 Cash Collection June sales       67,104.00 July sales with discount    485,232.80 July sales      153,920.00 Total Cash Collection    706,256.80 Purchases in $                511,940.00    494,450.00             526,570.00        540,320.00 Selling,general & admin exp.                153,920.00    150,080.00             145,280.00        151,360.00 (-) Depreciation                     5,000.00         5,000.00                  5,000.00             5,000.00 Selling,general & admin exp.-Cash                148,920.00    145,080.00             140,280.00        146,360.00 Cash disbursement August Purchases             252,169.50 August selling,gen.admin exp.               73,990.80 September Purchases             258,019.30 September selling,gen.admin exp.               68,737.20 Total Cash disbursement             652,916.80 Answer a Budgeted purchases in August = 44950 units * $11 = $494450 Answer b Budgeted purchases in September = 47870 units * $11 = $526570 Answer c Budgeted cash collection during August = $706256.80 Answer d Budgeted cash disbursement during september = $652916.80 Answer e Budgeted number of units of inventory to be purchased during october = 49120 units

Related Questions

Navigate

• Browse (All)
• Browse D
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.