Estimate purchases and cash disbursements

Assignment Help Financial Accounting

Reference no: EM13753284

Estimate Purchases and Cash Disbursements

(LO 13-4, 5)

White Products wishes to purchase goods in one month for sale in the next. On March 31, the company has 8,000 portable music players in stock, although sales for the next month (April) are estimated to total 8,600 players. Total sales of players are expected to be 7,000 in May and 7,400 in June.

Portable music players are purchased at a wholesale price of $45. The supplier has a financing arrangement by which White Products pays 60 percent of the purchase price in the month when the players are delivered and 40 percent in the following month. White purchased 10,000 players in March.

Required

Estimate purchases (in units) for April and May.

Estimate the cash required to make purchases in April and May.

Reference no: EM13753284

Questions Cloud

Determine gross profit : Build a model to help a company determine gross profit. Gross profit is simply the excess of revenues over expenses. The company’s total costs contain both fixed and variable costs. Fixed costs are the same no matter how many units they sell, and var..

Description amount description amount : A summary of the time tickets for August follows: Description Amount Description Amount Job No. 321 $11,000 Job No. 342 $8,300 Job No. 329 9,200 Job No. 346 5,700 Job No. 336 3,000 Present the journal entries to record (a) the labor cost incurred and..

What is the function of a credit rating agency : What is the function of a credit rating agency and why have these agencies prospered- why do credit ratings under pip the world's financial system'?

Credit account titles are automatically indented : Kohl Company lent $52,900 to Hemingway, Inc, accepting Hemingway's 2-year, $64,009, zero-interest-bearing note. The implied interest rate is 10.0%. Prepare Kohl's journal entries for the initial transaction, recognition of interest each year, and the..

Estimate purchases and cash disbursements : White Products wishes to purchase goods in one month for sale in the next. On March 31, the company has 8,000 portable music players in stock, although sales for the next month (April) are estimated to total 8,600 players. Total sales of players are ..

Properly target the most lucrative part of a market : Describe the marketing processes that are necessary before an organisation can properly target the most lucrative part of a market.

Suppose management is considering offering credit sales : Suppose management is considering offering credit sales to customers but is unsure of what the generally accepted accounting principles are concerning uncollectible accounts receivables. You are the senior accountant, and management has asked for you..

Treasurer of your organization : Imagine that you are the treasurer of your organization, and the company is in need of cash; unfortunately, the company is unable to secure a loan from the bank. Suggest at least two (2) ways in which the company can obtain the needed cash. Compare a..

Uses the instalment-sales method : Mandarin Partners appropriately uses the instalment-sales method of accounting to recognize income in its financial statements. The following information is available for 2014 and 2015.

User Account

All Pages