Reference no: EM132974311
A merchandising firm by the name of Star Wars Enterprises, had an inventory of 47,000 units on March 31, and it had accounts receivable totaling $86,500. Sales, in units, have been budgeted as follows for the next four months:
April 54,000
May 65,000
June 87,000
July 83,000
To be enforced in April, Star Wars board of directors has established a policy that states that the inventory at the end of each month should contain 35% of the units required for the following month's budgeted sales. $2.5 is the selling price per unit. One-Quarter of sales are paid for by customers in the month of the sale; the balance is collected in the following month.
Required:
Problem 1. Prepare a merchandise purchases budget showing how many units should be purchased for each of the months April, May, and June.
Problem 2. Prepare a schedule of expected cash collections for each of the months April, May, and June.
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