Unifying Concepts: Sales, Cash Collections, and Purchases Budgets The following information is available for Laurel Company, a wholesale company:

Additional information:

a. Each month 75% of sales is collected by month-end; the remaining 25% is collected in the following month.

b. The desired inventory every month is 30% of the next month’s sales.
Required:
1. Prepare sales budgets for October, November, and December (in dollars).
2. Prepare cash collection budgets for October, November, and December (in dollars).
Assume that all sales are on credit.
3. Prepare purchases budgets for October, November, and December (in units).

Transcribed Image Text:

Expected sales volume: October November December Selling price per unit Accounts receivable balance, October 1 Desired ending inventory, December 31 Beginning inventory, October 1 6,200 units 6,700 units 7,100 units $45 $55,000 1,800 units 2,000 units