Project 2-Operating budgets for merchandising and service organisations (Chapters 2 and 3) Question 1 Bach Distributors is a wholesaler of grocery items. As the accountant, you have been asked to develop the operating budgets. The budget must be prepared taking into consideration the following information: Sales 1. Sales in units are: May (actual) 8 260 June (actual) 8 470 July 8 330 August 7980 September 8 400 October 8 540 2. Average selling price is $17 per unit. 3. Each month's sales will be invoiced on the last day of that month. 4. All sales are on credit. 5. Accounts receivable pay 80% in the month following sale and are allowed a 2% discount; 17% in the second month after sale; and, 3% are uncollectible. 6. Bad debts are recognised in the month of sale. Project 2-Operating budgets for merchandising and service organisations (Chapters 2 and 3) Question 1 Bach Distributors is a wholesaler of grocery items. As the accountant, you have been asked to develop the operating budgets. The budget must be prepared taking into consideration the following information: Sales 1. Sales in units are: May (actual) 8 260 June (actual) 8 470 July 8 330 August 7980 September 8 400 October 8 540 2. Average selling price is $17 per unit. 3. Each month's sales will be invoiced on the last day of that month. 4. All sales are on credit. 5. Accounts receivable pay 80% in the month following sale and are allowed a 2% discount; 17% in the second month after sale; and, 3% are uncollectible. 6. Bad debts are recognised in the month of sale