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Please help me with the following question. Thank you!! Alpha Company is a retailer and all sales are billed monthly, on the 10th of the
Please help me with the following question. Thank you!!
Alpha Company is a retailer and all sales are billed monthly, on the 10th of the month following the month of sales. Collection of receivable is 80% within the month of billing, and the remainder by the end of the next month. Except for May the estimated sales for following four months are: May (actual) S500.000; June S600,000; July, S700,000; August S700,000, and September S400,000. Alpha Company experiences a Gross Profit Margin of 20%. Merchandise is purchased to meet the current month's sales-demand & to maintain a desired monthly ending merchandise inventory of 25% of the following month's sales. All purchases are on credit, and paid for 10% in the month of purchase, and 90% in the next month. Use this information to determine the following: (Round all dollar values to the nearest dollar and report whole dollars only.) 1. The amount of cash that Alpha Company plans to collect from accounts receivable collections during July 2. The amount of cash that Alpha Company plans to collect from accounts receivable collections during August. 3. The ending Merchandise Inventory budgeted to be on hand on August 31. 4. The amount of merchandise that Alpha Company budgets to purchase during June 5. The amount that Alpha Company should budget in August for merchandise paymentsStep by Step Solution
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