Question
Trimmers Corporation actual November and December unit sales and estimated unit sales for the following four months are as follows: November 6,700 units December 9,800
Trimmers Corporation actual November and December unit sales and estimated unit sales for the following four months are as follows: November 6,700 units December 9,800 units January 6,200 units February 8,900 units March 6,600 units April 7,100 units The company's inventory policy is to hold enough inventory at the end of the month to meet 30% of next month's sales requirements. Each investory term costs $1.75 Cash disbursement on purchases is made as follows: 40% is paid in the month of purchase and 60% is paid in the month following purchase Each item sells for $4.00 and cash collection patterns are as follows: 20% of sales made in cash Credit sales are collected as follows 35% in the month of sale 40% in the month following the sale 23% in the second month following the sale o2% are never collected Required (THREE questions below) a) Estimate the purchases (in units) for the months of January through March. b) Estimate the cash disbursements on purchases for the months of January through March. What is the accounts payable balance at the end of March? c) Estimate the cash collections for the months of January through March. What is the accounts receivable balance at the end of March
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