Question
A merchandising firm by the name of Star Wars Enterprises, had an inventory of 48,000 units on March 31, and it had accounts receivable totaling
A merchandising firm by the name of Star Wars Enterprises, had an inventory of 48,000 units on March 31, and it had accounts receivable totaling $87,500. Sales, in units, have been budgeted as follows for the next four months:
April
54,000
May
65,000
June
88,000
July
84,000
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 35% of the units required for the following month's budgeted sales. $2.5 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.
Required:
1.GIVE a merchandise purchases budget showing how many units should be purchased for
each of the months April, May, and June.
2.GIVE schedule of expected cash collections for each of the months April, May, and June.
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