TabComp Inc Cash Sales Account for 25% of TabComp's Total Sales,30% of Related

question 42

Essay

TabComp Inc.is a retail distributor for MZB-33 computer hardware and related software.TabComp prepares annual sales forecasts,of which the first six months of the coming year are presented below:
$\begin{array}{|l|r|r|r|r|} \hline& \text { Hardware units } & \begin{array}{r}\text { Hardware } \\\text { dollars }\end{array} & \text { Software } & \text { Total sales } \\\hline \text { January } & 130 & \$ 390,000 & \$ 160,000 & \$ 550,000 \\\hline \text { February } & 12 \mathrm{q} & 360,000 & 140,000 & 500,000 \\\hline \text { March } & 110 & 330,000 & 150,000 & 480,000 \\\hline \text { Apri1 } & 90 & 270,000 & 130,000 & 400,000 \\\hline \text { May } & 100 & 300,000 & 125,000 & 425,000 \\\hline \text { Tune } & 125 & 375,000 & 225,000 & 600,000\\\hline\end{array}$
Cash sales account for 25% of TabComp's total sales,30% of the total sales are paid by bank credit card,and the remaining 45% are on open account (TabComp's own charge accounts).The cash and bank credit card sale payments are received in the month of the sale.Bank credit card sales are subject to a 4% discount,which is deducted immediately.The cash receipts for sales on open account are 70% in the month following the sale and 28% in the second month following the sale; the remaining are uncollectible.
TabComp's month-end inventory requirements for computer hardware units are 30% of the next month's sales.The units must be ordered two months in advance due to long lead times quoted by the manufacturer.
Required:
A)Calculate the cash that TabComp can expect to collect during April.Show all of your calculations.
B)Determine the number of computer hardware units that should be ordered in January.Show all of your calculations.

• A)Calculate the cash that TabComp can expect to collect during April.Show all of your calculations.
• B)Determine the number of computer hardware units that should be ordered in January.Show all of your calculations.

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Definitions:

Net Income

Represents the company's total earnings, reflecting the company's profit after all costs and taxes have been subtracted from revenues.

Cash Dividends Paid

The total amount of cash distributed by a company to its shareholders as dividends during a specific period.

Retention Ratio

The share of net income that remains in the business instead of being paid out to shareholders in the form of dividends.

Sustainable Growth Rate

The maximum rate at which a company can grow its sales and earnings without increasing its debt or equity.