Information pertaining to Yek Company's budgeted sales revenue for the first quarter of the coming...
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Accounting
Information pertaining to Yek Company's budgeted sales revenue for the first quarter of the coming year is presented below.
January
February
March
Cash sales
120,000
160,000
275,000
Credit sales
330,000
440,000
275,000
Total sales
$450,000
$600,000
$550,000
Management estimates that four percent of credit sales are likely to be uncollectible. Of the collectible credit sales, 65% are expected to be collected in the month of sale and the remainder in the month following the month of sale. Customers are granted a 2% discount for payment within 15 days of billing. Approximately, 30% of the collectible credit sales take advantage of the cash discount. Purchases of inventory each month include 75% of the next month's projected total sales (stated at cost) plus 25% of projected sales for the current month (stated at cost). All inventory purchases are on account. 30% is paid in the month of purchase, and the remainder is paid in the month following the month of purchase. Purchase costs are approximately 60% of the selling price. Required: Calculate total budgeted cash receipts for February.
Calculate total cash payment in February for inventory purchase.
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