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Carmen is a retailer of scrapbooking products. The sales forecast for the coming months is: April May June July August Revenues $ 259,000 $ 268,000 $ 292,000 $ 348,000 $360,000 Carmen's sales are 80% cash and 20% store credit. The credit sales are collected 70% in the month of sale, the remainder the following month. Accounts receivable on April 1 are $40,000. Carmen's cost of sales averages 60% of revenues. The inventory policy is to carry 30% of next month's sales needs. April 1 inventory will be as expected under the policy. Carmen pays for purchases 20% in the month of purchase and 80% the following month. Accounts payable on April 1 is $130,000. a. Prepare a purchases budget for as many months as is possible. Sales Cost of Sales Percentage Cost of Sales Ending Inv Beginning Inv Purchases April % May % June % July % August %

Carmen is a retailer of scrapbooking products. The sales forecast for the coming months is: April May June July August Revenues $ 259,000 $ 268,000 $ 292,000 $ 348,000 $360,000 Carmen's sales are 80% cash and 20% store credit. The credit sales are collected 70% in the month of sale, the remainder the following month. Accounts receivable on April 1 are $40,000. Carmen's cost of sales averages 60% of revenues. The inventory policy is to carry 30% of next month's sales needs. April 1 inventory will be as expected under the policy. Carmen pays for purchases 20% in the month of purchase and 80% the following month. Accounts payable on April 1 is $130,000. a. Prepare a purchases budget for as many months as is possible. Sales Cost of Sales Percentage Cost of Sales Ending Inv Beginning Inv Purchases April % May % June % July % August %

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Carmen is a retailer of scrapbooking products. The sales forecast for the coming months is: April May June July August Revenues $ 259,000 $ 268,000 $ 292,000 $ 348,000 $360,000 Carmen's sales are 80% cash and 20% store credit. The credit sales are collected 70% in the month of sale, the remainder the following month. Accounts receivable on April 1 are $40,000. Carmen's cost of sales averages 60% of revenues. The inventory policy is to carry 30% of next month's sales needs. April 1 inventory will be as expected under the policy. Carmen pays for purchases 20% in the month of purchase and 80% the following month. Accounts payable on April 1 is $130,000. a. Prepare a purchases budget for as many months as is possible. Sales Cost of Sales Percentage Cost of Sales Ending Inv Beginning Inv Purchases April % May % June % July % August %
Transcribed Image Text:Carmen is a retailer of scrapbooking products. The sales forecast for the coming months is: April May June July August Revenues $ 259,000 $ 268,000 $ 292,000 $ 348,000 $360,000 Carmen's sales are 80% cash and 20% store credit. The credit sales are collected 70% in the month of sale, the remainder the following month. Accounts receivable on April 1 are $40,000. Carmen's cost of sales averages 60% of revenues. The inventory policy is to carry 30% of next month's sales needs. April 1 inventory will be as expected under the policy. Carmen pays for purchases 20% in the month of purchase and 80% the following month. Accounts payable on April 1 is $130,000. a. Prepare a purchases budget for as many months as is possible. Sales Cost of Sales Percentage Cost of Sales Ending Inv Beginning Inv Purchases April % May % June % July % August %
es b. Prepare a cash payments budget for April through July. From This Month From Last Month Cash Payments April Cash Sales Collected in the Month of Sale Collected the Following Month Cash Collected May June c. Prepare a cash receipts budget for April through July. (Do not round intermediate calculations.) April July May June July
Transcribed Image Text:es b. Prepare a cash payments budget for April through July. From This Month From Last Month Cash Payments April Cash Sales Collected in the Month of Sale Collected the Following Month Cash Collected May June c. Prepare a cash receipts budget for April through July. (Do not round intermediate calculations.) April July May June July
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