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plz answer both questions respectively and asap A merchandising firm by the name of Star Wars Enterprises, had an inventory of 48,000 units on March
plz answer both questions respectively and asap
A merchandising firm by the name of Star Wars Enterprises, had an inventory of 48,000 units on March 31, and it had accounts receivable totaling $87,500. Sales, in units, have been budgeted as follows for the next four months: April 54,000 May 65,000 June 88,000 | July 84,000 To be enforced in April, Star Wars board of directors has established a policy that states that the inventory at the end of each month should contain 35% of the units required for the following month's budgeted sales. $2.5 is the selling price per unit. One-Quarter of sales are paid for by customers in the month of the sale; the balance is collected in the following month. Required: 1. Prepare a merchandise purchases budget showing how many units should be purchased for each of the months April, May, and June. 2. Prepare a schedule of expected cash collections for each of the months April, May, and June. Fonsey Corporation, a merchandising company, has provided the following budget data: Purchases Sales Month $39,500 $69,000 January 47,200 65,900 February 37,500 61,200 March 54,000 79,850 April 59,500 72,600 May Collections from customers are normally 60% in the month of sale, 17% in the month following the sale, and 20% in the second month following the sale. It is expected that the balance be uncollectible. Fonsey pays for purchases in the month following the purchase. Cash disbursements for expenses other than merchandise purchases are expected to be $13,800 for May. Fonsey's cash balance on May 1 was $27,500. Required: 1. Compute the expected cash collections during May. 2. Compute the expected cash balance on May 31Step by Step Solution
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