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Delhi, Inc., seeks your assistance in developing cash and other budget information for August, September, and October

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solution


Question

Problem 13-47 Budgeted Purchases and Cash Flows (LO 13-4, 5, 6);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 $11,000, accounts receivable of $885,000, inventories of $672,100, and accounts payable of $184,456. 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: 55 percent within the discount period, 30 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 15 percent of the current month?s sales.;?;Actual and projected sales follow;Dollars Units;June $ 769,600 48,100;July 763,200 47,700;August 752,000 47,000;September 721,600 45,100;October 760,000 47,500;November 787,200 49,200;Required;(a) Compute the Budgeted purchases in dollars for August.;(b) Compute the Budgeted purchases in dollars for September.;(c) Compute the Budgeted cash collections during August. (Round your intermediate calculations and final answer to nearest dollar amount.);(d) Compute the Budgeted cash disbursements during September. (Round your intermediate calculations and final answer to nearest dollar amount.);(e) Compute the budgeted number of units of inventory to be purchased during October.

 

Paper#20749 | Written in 18-Jul-2015

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