1. Budgeting Inventories

For each independent situation below, determine the amounts indicated by the letters:

1 2 3

Beginning Inventory $10,000 $5,000 (e)

Produced $20,000 (c) $30,000

Available (a) $25,000 $35,000

Sold $15,000 (d) (f)

Ending Inventory (b) $10,000 $15,000

2. Budgeting Cash Collection

Bubbles Consulting, which invoices its clients on terms 2/10, n/30, had credit sales for March and April of $100,000 and $200,000, respectively. Analysis of the Companys operations indicates that the pattern of customers payments on account is as follows (percentages are of total monthly credit sales):

Beyond

Receiving Discount

Discount Period Totals

In month of sale 50% 25% 75%

In month following sale 10% 10% 20%

Uncollectible accounts, returns 5%

Determine the estimated cash collected on customers accounts in April.

3. Sales Budget

Ricky attempts to balance its concerns about stockouts of inventory with concerns about excess inventory for the year. Ricky has developed the probabilities below for sales for the coming year. What amount should Ricky budget for sales for the coming year?

Sales Level	Probability
$100,000	20%
$200,000	30%
$300,000	30%
$400,000	15%
$500,000	5%

Answer:

Sales Level	Probability	Probability-weighted amount
Total Sales