The following information is available for Durham Company, a merchandising retail company:

Additional information:

a. Seventy percent of a month's sales is collected by month-end; the remaining 30 percent is collected in the following month.

b. The desired inventory every month is 20 percent of the next month's sales.
Required:
1. Prepare sales budgets for April, May, and June (in dollars).
2. Prepare cash collection budgets for April, May, and June (in dollars). Assume that all sales are on credit.
3. Prepare purchases budgets for April, May, and June (in units).

Transcribed Image Text:

Expected sales volume: April May... June.. Selling price per unit... Accounts receivable balance, April 1 Desired ending inventory, June 30 Beginning inventory, April 1.. 3,200 units 3,000 units 3,500 units $25 $12,000 650 units 420 units