[kopz]

On 1 January 2012, Elliott Catering Pty Ltd is in the process of preparing its 3rd quarter budget for the year and provides you with the following data (GST incl.) relating to sales and inventory purchases.

MONTH SALES REVENUE $ INVENTORY PURCHASES $
November (actual) 120,000 88,000
December (actual) 145,000 90,000
January (budgeted) 110,000 78,000
February (budgeted) 105,000 95,000
March (budgeted) 136,000 80,000

Their experience is that sales are generally:
• 50% for cash
• 70% of credit sales are collected in the month following the sale
• The balance of the credit sales are collected two months after the sale.

When Elliott purchases inventory, they always take advantage of the 3% discount offered by inventory suppliers, by making the payments in the month after the purchase.

Elliott estimates the 1 January 2012 bank balance will be $15,000.

Required:
1. Calculate the amount of cash expected to be received from customers in each of the budgeted months January, February and March.
2. Calculate the amount of payments expected to be made for the purchase of inventory in each of the budgeted months January, February and March.
3. Calculate budgeted bank balance on 31 March 2012.
4. Calculate the budgeted accounts receivable balance on 31 March 2012.
5. Calculate the budgeted accounts payable balance on 31 March 2012.

[paraclete]

Seems a reasonable exercise, show us your attempt and ask your questions