Galaxy Lighting Company manufactures and sells lighting fixtures. Estimated sales for the next three months are:

September $350,000

October $500,000

November $400,000

Sales for August were $400,000 and December $420,000. All sales are on account. Galaxy Lighting Company estimates that 80% of the accounts receivable are collected in the month of sale with the remaining 20% collected the following month. The units sell for $40 each.

Generally, 60% of purchases are due and payable in the month of purchase with the remainder due the following month, Purchases cost per unit for the material is $18. The company maintains an end of month inventory of 1000 units plus 10% of next month's unit sales. August's ending inventory is estimated at 1,875 units and November's ending inventory is estimated as 2,500 units. The accounts payable balance on August 31 is expected to be $13,500 and should be paid in September.

1) Prepare a sales budget in dollars and units for September, October, and November

2) Prepare a schedule of cash receipts from customers.

3) Prepare a purchase budget for September, October, and November.

4) Prepare a schedule of cash payments for purchases

Part 2 Refer to the previous problem. In addition to the information given, selling and administrative expenses paid in cash are $220,000 per month. The cash balance for September 1 is $80,000.

Prepare a monthly cash budget for September, October and November for galaxy lighting company