Andrews Company, a merchandising firm that sells one product, estimates it will sell 11,000 units of its product at $59 per unit in December. In November, the company prepared other information to prepare a budget for December, as shown here:

Merchandise inventory, December 12,000 units Desired merchandise inventory for December 31 2,800 units Cost per unit of merchandise purchases $34 Selling and administrative expenses $210,000 Cash balance, December 1 $33,000 November sales $610,000

The company estimates that 80 % of each month's sales are collected in the month of sale and that the remaining 20 % is collected in the month after sale. The $ 210,000 of selling and administrative expenses includes $ 20,000of depreciation.The company pays for thirty percent of merchandise purchases during the month of purchase and pays the remainder during the month following purchase. Estimated merchandise purchases for November are $ 366,000.All other out-of-pocket expenses are paid for in cash.

Requirements

(a) How many units of merchandise will Andrews budget to purchase in December? What is the dollar amount of Andrews' budgeted merchandise purchases for December? (b) Prepare a budgeted income statement for the month ended December for Andrews Company. (c) Prepare a statement of estimated cash flows for the month ended December for Andrews Company.