Answered: Estimate purchases (in units) and cash…

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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Transcribed Image Text:Exercise 13-35 (Algo) Estimate Purchases and Cash Disbursements (LO 13-3, 4) Dawes Designs buys T-shirts for clubs, teams, and other organizations. Dawes takes the shirts and adds the organization's logo. Because of the uncertainty in the timing of the sales and to avoid stock outages, Dawes tries to maintain an inventory of shirts equal to two-month's of sales. The shirts cost $21.50 each and must be paid for in cash. On June 30 of the current year, the company expects to have 17,100 shirts in stock. Sales estimates, based on contracts received and historical data, are as follows for the next six months: July August 8,520 11,490 September 8,960 October 9,510 November 6,980 December 5,660 Required: a. & b. Estimate purchases (in units) and cash required to make purchases in July, August, and September. Units to be purchased Estimated cost DAWES DESIGNS Merchandise Purchases Budget For the Period Ended March 31 (in units) July August September

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