Question
XYZ Company is a retailer of upscale widget products. The sales forecast for the coming months is: Revenues April $ 250,000 May $ 275,000 June
XYZ Company is a retailer of upscale widget products. The sales forecast for the coming months is:
Revenues April $ 250,000 May $ 275,000 June $ 300,000 July $ 350,000 August $ 375,000
XYZ Company's sales are 60% cash and 40% store credit. The credit sales are 70% in the month of sale, and the remainder is collected in the following month. Accounts receivable on April 1 are $50,000 XYZ Company's cost of sales are averages 60% of revenues. The inventory policy is to carry 25% of next month's sales needs. April 1 inventory will be as expected under the policy. XYZ Company pays for purchases 56% in the month of purchase and the remaining amount in the following month. Accounts Payable on April 1 are $90,000
a. Prepare a purchases budget for as many months as is possible. b. Prepare a cash payments budget for April through June. c. Prepare a cash receipts budget for April through June.
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Auditing A Complete Guide Practical Tools For Self Assessment
Authors: Gerardus Blokdyk
1st Edition
0655424571, 978-0655424574
