# Streuling Enterprises_Budget

Question # 00004443 Posted By: ACCOUNTS_GURU Updated on: 12/03/2013 04:28 AM Due on: 12/31/2014
Subject Accounting Topic Accounting Tutorials:
Question

Q1. (15 marks) On March 31, Streuling Enterprises, a merchandising firm, had an inventory of 38,000 units, and it had accounts receivable totalling \$85,000. Sales, in units, have been budgeted as follows for the next four months:

 April 60,000 May 75,000 June 90,000 July 81,000

Streuling's board of directors has established a policy to commence in April that the inventory at the end of each month should contain 40% of the units required for the following month's budgeted sales.

The selling price is \$2 per unit. One-third of sales are paid for by customers in the month of the sale; the balance is collected in the following month.

Required:

a) Prepare a merchandise purchases budget showing how many units should be purchased for each of the months April, May, and June. Remember there is a difference between units and \$of the units - use the right figures in the right spots

b) Prepare a schedule of expected cash collections for each of the months April, May, and June. Remember the existing A/R balance

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1. ## Solution: Streuling Enterprises_Budget

Tutorial # 00004241 Posted By: ACCOUNTS_GURU Posted on: 12/03/2013 04:31 AM
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