A merchandising firm by the name of Star Wars Enterprises, had an inventory of 49,000 units on March 31, and it had gross accounts receivable totaling $88,500. Sales, in units, have been budgeted as follows for the next four months:

April	54,000
May	65,000
June	89,000
July	85,000

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 40% of the units required for the following month's budgeted sales. The purchase price is $1.78, and the company receives 5% discount for any quantity =<50,000 and 10% for the incremental quantity over 50,000.

$3.25 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. The company gives 3% discount for payment in the same month and 2% the following month when it is paid

Required:

1. Prepare a merchandise purchases budget showing how many units should be purchased and the dollar value for

each of the months April, May, and June (show the average price paid per unit) (8 marks)

2. Prepare a schedule of expected cash collections for each of the months April, May, and June. (8 marks)

3. Compute the discount the company gave to its customers for each of the month April, May and June? (4 marks) (part 2 & 3 may be combined)