Merchandise purchases budget?
I need to prepare an inventory purchases budget for months of May, June and July then determine the amount of ending inventory that will appear on the projected balance sheet at the end of July. Please Help.
On 30 April, George company had merchandise inventory of $94000 and accounts receivable totaling $185000(of which $23000 is owed from march). Sales were budgeted:
May $320000, June $390000, July $480000, August $260000
Cost of goods sold is 70% of sales. 30% of the following month's cost of goods sold should be maintained in ending inventory.
40% of each month;s sales are cash transactions
50% of each month's sales are collected the following month
10% of each month's sales are collected the second month following.
