Assignment # $4$

Q$1.$ At March $31,$ ABC Enterprises, a merchandising firm, had an inventory of $38,000$ units, and it had accounts receivable totalling $$85,000.$ Sales, in units, have been budgeted as follows for the next four months:

$\backslash$table$[[$April$,60,000],[$May$,75,000],[$June$,90,000],[$July$,81,000]]$

ABC's board of directors has established a policy to commence in April that the inventory at the end of each month should contain $40\%$ of the units required for the following month's budgeted sales.

The selling price is $$2$ per unit. One$-$third of sales are paid for by customers in the month of the sale, the balance is collected in the following month.

Required:

a$.$ Prepare a merchandise purchases budget showing how many units should be purchased for each of the months April, Mav, and June.

b$.$ Prepare a schedule of expected cash collections for each of the months April, May, and June.