Prepare a purchases budget by month for the first quarter

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Reference no: EM132816802

Pankey Company makes only one product. Its sales price is expecting to be $82.00 per unit.

Actual Sales

November 6,200 units

December 6,800 units

Pankey's Budgeted Sales for the next six months are as follows:

January 5,400 units

February 5,200 units

March 5,500 units

April 5,000 units

May 5,800 units

June 6,000 units

All sales are on account. Pankey collects its accounts receivable as follows:

70% in the month of sale

20% in the month following the sale

10% in the second month following sale

Uncollectible accounts are negligible and can be disregarded.

The beginning inventory on January 1 is 540 units. Pankey desires an ending finished goods inventory of 10% of the next month's production needs. Assume that Pankey met this requirement at the end of December of the previous year.

Pankey makes all purchase on accounts on terms net 30. Pankey pays its accounts payable as follows:

60% in the month of sale

40% in the month following the sale.

Purchases in December were 62,000

Problem 1. Prepare a sales budget by month for the first quarter and for the first quarter as a whole

Problem 2. Prepare a production budget by month for the first quarter and for the first quarter as a whole

Problem 3. Prepare a purchases budget by month for the first quarter and for the first quarter as a whole

Problem 4. Prepare a schedule of cash disbursements for accounts payable

Problem 5. Prepare a schedule of cash disbursements for accounts payable

Problem 6. Calculate the budgeted accounts receivable balance at March 31, 2013

Reference no: EM132816802

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