Compute Budgeted Purchases, Cash Collections, Cash Disburse

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7.
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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 $892,000, inventories
of $627,900, and accounts payable of $188,669. 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, 52 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 $10.
? Selling, general, and administrative expenses, of which $3,000 is depreciation, equal 20 percent of the
current month's sales.
? Actual and projected sales follow:

Dollars Units
June $ 715,500 47,700
July 724,500 48,300
August 724,500 48,300
September 693,000 46,200
October 723,000 48,200
November 739,500 49,300

Required:

(a) Compute the Budgeted purchases in dollars for August. (Omit the "$" sign in your response.)
Budgeted purchases $ 941850

(b) Compute the Budgeted purchases in dollars for September. (Omit the "$" sign in your response.)
Budgeted purchases $ 724500

(c) Compute the Budgeted cash collections during August. (Round your intermediate calculations and
final answer to nearest dollar amount. Omit the "$" sign in your response.)
Budgeted cash collections $

(d) Compute the Budgeted cash disbursements during September. (Round your intermediate
calculations and final answer to nearest dollar amount. Omit the "$" sign in your response.)
Budgeted cash disbursements $

(e) Compute the budgeted number of units of inventory to be purchased during October.
Budgeted number of units 97500