Limited is currently preparing budgets for September to December.

September	October	November	December
Sales (units)	4,531	10,946	3,595	18,764

Its estimated sales figures in units are as follows:

Inventories at 31 August totalled

16,648

units, and inventories are to be kept at a constant level for all months except December, when opening inventories on 1 December are to be increased to

24,574.

Inventories will revert to the normal level on 31 December.Inventories will cost 2 per unit throughout the period, and suppliers allow

Aggrava

Ltd to pay in the month following an order. Other relevant information is that

6,998

units were bought in August.Requirement 1: Prepare

Aggrava

Ltd's inventories budget (in units) for September to December.

Requirement 2: Prepare the information relevant to inventories purchases that would appear in the cash budget for the period.

Question content area bottom

Part 1

Requirement 1:

Aggrava

Ltd's inventories budget (in units) is as follows:

(Fill in the relevant cells with its corresponding figures. Negative figures should be entered in brackets.)

	September	October	November	December
Opening inventories (A)	16648
Sales forecast (B)
A - B = (C)
Inventories purchase* (E - C)
Closing inventories (E)

* same as 'sales forecast' for each month except November and December, when inventories increase and then revert to normal.

Part 2

Requirement 2: Relevant information relating to inventories purchases for the cash budget is as follows:

(Fill in the relevant cells with its corresponding figures.)

	August	September	October	November	December
Inventories purchased (units) (A)
Cost per unit () (B)	2	2	2	2	2
Cost of inventories bought () [A*B = (C)]
Cash outflow ()