Carmen is a retailer of scrapbooking products. The sales forecast for the coming months is Revenues April $253,000 May $272,000 June $291,000 July $342,000 August $351,000 Carmen's sales are 70% cash and 30% 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 70% of revenues. The inventory policy is to carry 30% of next month's sales needs. Aprill 1 inventory will be as expected under the policy. Carmen pays for purchases 40% in the month of purchase and 60% the following month Accounts payable on April 1 is $128,000. 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 $ From This Month From Last Month Cash Payments April April b. Prepare a cash payments budget for April through July 253,000 $ % Cash Sales Collected in the Month of Sale Collected the Following Month Cash Collected August May July 272,000 $ 291,000$ 342.000 $ 351.000 % % % May June June c. Prepare a cash receipts budget for April through July. (Do not round intermediate calculations) April May July June July
Carmen is a retailer of scrapbooking products. The sales forecast for the coming months is Revenues April $253,000 May $272,000 June $291,000 July $342,000 August $351,000 Carmen's sales are 70% cash and 30% 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 70% of revenues. The inventory policy is to carry 30% of next month's sales needs. Aprill 1 inventory will be as expected under the policy. Carmen pays for purchases 40% in the month of purchase and 60% the following month Accounts payable on April 1 is $128,000. 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 $ From This Month From Last Month Cash Payments April April b. Prepare a cash payments budget for April through July 253,000 $ % Cash Sales Collected in the Month of Sale Collected the Following Month Cash Collected August May July 272,000 $ 291,000$ 342.000 $ 351.000 % % % May June June c. Prepare a cash receipts budget for April through July. (Do not round intermediate calculations) April May July June July
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Carmen is a retailer of scrapbooking products. The sales forecast for the coming months is
Revenues
April $253,000
May
$272,000
June
$291,000
July $342,000
August $351, 000
Carmen's sales are 70% cash and 30% 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 70% 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 40% in the month of purchase and
60% the following month
Accounts payable on April 1 is $128,000.
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
$ 253,000 $ 272,000 $ 291,000
%
From This Month
From Last Month
Cash Payments
b. Prepare a cash payments budget for April through July.
April
%
May
Cash Sales
Collected in the Month of Sale
Collected the Following Month
Cash Collected
June
July
May
c. Prepare a cash receipts budget for April through July. (Do not round intermediate calculations.)
April
July
$342.000
June
%
July
August
$351,000
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