Ask Experts Questions for FREE Help !
Ask
    karlal's Avatar
    karlal Posts: 3, Reputation: 1
    New Member
    		  
    #1

    Dec 1, 2009, 08:29 AM
    Merchandise inventory budget?
    At March 31 St. Enterprises, a merchandise firm, had an inventory of 38000 units and it had accounts receivable totaling $85000. 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)

    The company board of directors has established a policy to commerce 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.

    Prepare a merchandise purchases budget showing how many units should be purchased for each of the months April, May, and June

    Please someone help!

    I got 30,000 for April, 36,0000 for May, and 32400 for June.
    Could anyone please help me solve this??
    rehmanvohra's Avatar
    rehmanvohra Posts: 739, Reputation: 27
    Senior Member
    		  
    #2

    Dec 1, 2009, 10:52 AM

    How did you arrive at these figures you mentioned?

    The procedure is:
    Sales
    Add: Ending inventory (40% of next month's sale)
    Less Beginning inventory
    Budgeted purchases
    karlal's Avatar
    karlal Posts: 3, Reputation: 1
    New Member
    		  
    #3

    Dec 1, 2009, 11:35 AM

    I did the following:

    30000 for April (75000*40%)
    36000 for May (90000*40%)
    32400 for June (81000*40%)

    The procedure seems simple but how do I get the beginning inventory??
    rehmanvohra's Avatar
    rehmanvohra Posts: 739, Reputation: 27
    Senior Member
    		  
    #4

    Dec 1, 2009, 10:02 PM
    Quote Originally Posted by karlal View Post
    I did the following:

    30000 for April (75000*40%)
    36000 for May (90000*40%)
    32400 for June (81000*40%)

    The procedure seems simple but how do I get the beginning inventory??????
    Beginning inventory for April is given at 38000 units. For May it will be April's ending inventory and so on for June
Not your question? Ask your question View similar questions
 

Question Tools Search this Question
Search this Question:

Advanced Search


Check out some similar questions!

Merchandise purchases budget [ 1 Answers ]

How do I prepare a merchandise purchases budget for each month in columnar form?

Merchandise purchases budget? [ 1 Answers ]

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...

Merchandise Purchases Budget- Beginning Inventory [ 1 Answers ]

Hey guys I really need help! I have this Current assets as of Dec 31: Cash: $6,000 Accounts Receivable: $36,000 Inventory $9,800 Building and Equipment, net: $110,885

Periodic inventory worksheet-Merchandise Inventory [ 1 Answers ]

I can't figure out what I am missing under a periodic inventory. My beginning merchadise inventory as of jan 1 is 20,000. Merchandise inventory at Jan 31st is 15000. How do I record on the worksheet the diffrence between the beginning and ending merchandise inventory. Do I have to add an...

View more questions Search