Question
A merchandising firm by the name of Star Wars Enterprises, had an inventory of 49,000 units on March 31, and it had accounts receivable totaling
A merchandising firm by the name of Star Wars Enterprises, had an inventory of 49,000 units on March 31, and it had 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 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. Prepare a merchandise purchases budget showing how many units should be purchased for each of the months
April, May, and June. 2. Prepare a schedule of expected cash collections for each of the months April, May, and June.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started