25.)

Young is a retailer of assorted baby products. The sales forecast for the coming months is:

	Revenues
April	$	179,000
May	$	209,000
June	$	215,000
July	$	244,000
August	$	232,000

Youngs cost of sales averages 60% of revenues. The inventory policy is to carry 20% of next months sales needs. April 1 inventory will be as expected under the policy.

Young pays for purchases 70% in the month of purchase and 30% the following month. Accounts payable on April 1 is $22,400.

a.

Prepare a purchases budget for as many months as is possible.

	April		May		June		July		August
Sales
x 60%		%		%		%		%		%
Cost of Sales
Ending Inv
Beginning Inv
Purchases

b.	Prepare a cash payments budget for April through July.

	April	May	June	July
From This Month
From Last Month
Cash Payments	$0	$0	$0	$0