Reference no: EM133150107
Question - A merchandising firm by the name of Star Wars Enterprises, had an inventory of 48,000 units on March 31, and it had gross accounts receivable totaling $88,000. Sales, in units, have been budgeted as follows for the next four months:
April 54,000
May 65,000
June 89,000
July 85,000
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 40% of the units required for the following month's budgeted sales. The purchase price is $1.77, and the company receives 5% discount for any quantity =<50,000 and 11% for the incremental quantity over 50,000.
$3.35 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. The company gives 4% discount for payment in the same month and 3% the following month when it is paid
Required -
1. Prepare a merchandise purchases budget showing how many units should be purchased and the dollar value for each of the months April, May, and June.
2. Prepare a merchandise purchases budget showing how many units should be purchased and the dollar value for each of the months April, May, and June
3. Compute the discount the company gave to its customers for each of the month April, May and June.
|
Define trade or business
: Define a trade or business, and then discuss the concepts of ordinary, necessary, and reasonable in relation to trade or business expenses.
|
|
When depreciation is deducted on rental property
: When depreciation is deducted on a rental property, why is it beneficial for the taxpayer to allocate the cost of the property to other assets
|
|
Specific procedures to deal
: Describe at least 3 risks and specific procedures to deal with them. How do they meet the objectives you established?
|
|
Expenses on company financial statements
: How are they different from Liabilities? Describe the effects of assets and expenses on the company's financial statements.
|
|
Prepare a merchandise purchases budget
: Prepare a merchandise purchases budget showing how many units should be purchased and the dollar value for each of the months April, May, and June
|
|
Record transaction in accounting
: Describe each of these three ways and indicate where on the financial statements you could find the information about each.
|
|
Analyse the csrs activities of a specific business
: Analyse the CSR&S activities of a specific business using publicly available documents from the business e.g. annual reports, CSR Report, web-site information
|
|
Ethical implications of bill actions
: Explain if you think there are ethical implications of Bill's actions. Which ratios will be affected, and how, by accelerating these sales?
|
|
Explain for your new business associates
: Explain for your new business associates how you would do the accounting for this type of business.
|