Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. the sales budget of mulls company for the fourth q

The sales budget of Mulls Company for the fourth quarter of 20X6 is as follows:...

70.2K

Verified Solution

Question

Accounting

The sales budget of Mulls Company for the fourth quarter of 20X6 is as follows:

image

a) Compute the cash collections for December.

b) Compute the cash disbursements for purchases during December.

October NovemberDecember $91,000 $76,000 $108,000 Sales Sales are 20% cash, 80% credit. Cost of goods sold is 70%of total sales. Desired ending inventory for each month is equal to 25% of cost of goods sold for the following month. Collections on credit sales are as follows 50%in the month of sale 30%in the month following sale 15%in the second month following sale 5%uncollectible October 1 inventory is $16,000 Expected sales for January 20X7 are $84,000. Payments for inventory are 70% in the month following purchase and 30% two months following purchase

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students