Keggler's Supply is a merchandiser of three different products. The company's February 28 inventories are footwear, 19.000 units: sports equipment, 78,500 units; and apparel, 48,500 units. Management believes each of these inventories is too high. As a result, a new policy dictates that ending inventory in any month should equal 29% of the expected unit sales for the following month. Expected sales in units for March, April, May, and June follow. Footwear Sports equipment Apparel 3 Be Budgeted Sales in Units March April May June 14.500 23.000 33,000 36.500 69,500 90.500 94,500 90.000 41,500 38,000 32,000 24,000 Required: 1. Prepare a merchandise purchases budget (in units) for each product for each of the months of March, April, and May For Ma April KEGGLER'S SUPPLY Merchandise Purchases Budget For March April, and May March FOOTWEAR Budgeted sales for next month 23,000 Ratio of ending Inventory to future sales 29% Budgeted ending inventory Budgeted units sales for month Required units of available merchandise 33,000 36,500 29% March May April E 33,000 36,500 - FOOTWEAR Budgeted sales for next month Ratio of ending inventory to future sales Budgeted ending inventory Budgeted units sales for month Required units of available merchandise 23,000 29% %62 - NI LO I LULU 1 T 1 1 T Budgeted purchases SPORTS EQUIPMENT Budgeted sales for next month Ratio of ending inventory to future sales Budgeted ending inventory Budgeted units sales for month Required units of available merchandise Actual (or estimated) beginning inventory Budgeted purchases APPAREL Budgeted sales for next month Ratio of ending inventory to future sales Budgeted ending inventory Budgeted units sales for month Required units of available merchandise Actual (or estimated) beginning inventory Budgeted purchases NIL I During the last week of August, Oneida Company's owner approaches the bank for a $107,500 loan to be made on September 2 and repaid on November 30 with annual interest of 15%, for an interest cost of $4,031. The owner plans to increase the store's inventory by $60,000 during September and needs the loan to pay for inventory acquisitions. The bank's loan officer needs more information about Oneida's ability to repay the loan and asks the owner to forecast the store's November 30 cash position. On September 1, Oneida is expected to have a $4,500 cash balance, $146,300 of net accounts receivable, and $100,000 of accounts payable. Its budgeted sales, merchandise purchases, and various cash disbursements for the next three months follow. September $ 220,000 225,000 October $ 435,000 225,000 November $ 480,000 199,000 Budgeted Figures Sales Merchandise purchases Cash payments Payroll Rent Other cash expenses Repayment of bank loan Interest on the bank loan 20,300 8,000 34,300 22,050 8,000 29,000 24,100 8,000 20,050 107,500 4,031 Operations began in August; August sales were $190,000 and purchases were $100,000 The budgeted September merchandise purchases include the inventory increase. All sales are on account. The company predicts that 23% of credit sales is collected in the month of the sale, 47% in the month following the sale, 19% in the second month, 7% in the third, and the remainder is uncollectible. Applying these percents to the August credit sales, for example, shows that $89,300 of the $190,000 will be collected in September, $36,100 in October, and $13,300 in November. All merchandise is purchased on credit: 80% of the balance is paid in the month following a purchase, and the remaining 20% is paid in the second month. For example of the $100,000 August purchases, $80,000 will be paid in September and $20,000 in October Required: Prepare a cash budget for September October, and November. (Round your final answers to the nearest whole dollar.) Calculation of cash receipts from sales Collected in----- Total Sales Uncollectible August September October -- November 30. November Accounts Rec. Credit sales from: August September $ 190,000 220,000 Required: Prepare a cash budget for September, October, and November. (Round your final answers to the nearest whole dollar.) Calculation of cash receipts from sales Collected in- Total Sales Uncollectible August September October November 30. November Accounts Rec. Credit sales from: August September 1 October November Totals $ 190,000 220,000 435,000 480,000 $ 1,325,000 Calculation of cash payments for merchandise Paid in August September October November 30. Total Purchases November Accounts Pay. $ 100,000 | | Purchases from: August September October November Totals 225,000 199,000 749,000 $ ONEIDA COMPANY Cash Budget For September, October, and November September October Beginning cash balance $ 4,500 Cash receipts - November Total cash available Cash payments: STO TO Total cash payments Ending cash balance