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The following is data from Star Company, which is a distributor of soap products: March 31 Cash $16.000.000 Accounts receivable $40.000.000 Inventory $72.000.000 Building and

The following is data from Star Company, which is a distributor of soap products:

March 31

Cash
$16.000.000
Accounts receivable
$40.000.000
Inventory
$72.000.000
Building and equipment, net
$240.000.000
Accounts payable
$44.000.000
Capital stock
$300.000.000
Retained earnings
$24.000.000


Gross margin is 25% of sales. Actual and budgeted sales data:

March (actual)
$100.000.000
April
$120.000.000
May
$144.000.000
June
$180.000.000
July
$96.000.000


90% cash receipts from sales and 10% credit. Repayment of credit sales will be received in the following month. The accounts receivable (March 31) is the result of credit sales in March.

Every month ending inventory 70% of the budgeted cost of goods sold in the following month. Inventory is purchased with 50% cash in that month while the remaining 50% will be paid in the following month. Accounts payable (March 31) is the result of purchasing an inventory in March.

Using previous data:
a. Create a schedule of expected cash collections for April, May, and June, and for the quarter in total.
b. Complete the following budget:

Merchandise Purchases Budget



April

May

June
Quarter
Budgeted cost of goods sold



Ending inventory                                                               



Total needs



Beginning inventory                                                         



Required purchases




c. Make a schedule of expected cash disbursements - merchandise purchases for the months of April, May, and June and for the quarter in total.
d. Start-Up companies need to hire a financial professional. You are hired as a part time CFO. You must prepare a cash flow forecasting system. Give  and explain your description of how to handle this task. 


Note: The solution shows the correct and structured calculations and is supported by a comprehensive discussion

Thank you very much!

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