SOLVE

Problem D Galaxy Lighting Company manufactures and sells lighting fixtures. Estimated sales for the next three months are: September S 350,000 October S 500,000 November S 400,000 Sales for August were $400,000 and December is estimated as $420,000. All sales are on account. Galaxy Lighting Company estimates that 80% of the accounts receivable are collected in the month of sale with the remaining 20% collected the following month. The units sell for $40 each. Generally, 60% of purchases are due and payable in the month of purchase with the remainder due the following month. Purchase cost per unit for materials is $18. The company maintains an end-of-the-month inventory of 1,000 units plus 10% of next month's unit sales. August's ending inventory is estimated at 1,875 units and November's ending inventory is estimated as 2,500 units. The accounts payable balance on August 31 is expected to be $13,500 and should be paid in September. 1. Prepare a sales budget in dollars and units for September, October, and November. 2. Prepare a schedule of cash receipts from customers 3. Prepare a purchases budget for September, October and November. 4. Prepare a schedule of cash payments for purchases