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YGF Company is a retailer of upscale widget products. The sales forecast for the coming months is: Revenues:
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YGF Company is a retailer of upscale widget products. The sales forecast for the coming months is:
Revenues: April $250,000, May $275,000, June $300,000, July $350,000, August $375,000
YGF Company's sales are 60% cash and 40% store credit. The credit sales are 70% in the month of sale,and the remainder is collected in the following month. Accounts receivable on April 1 are $50,000. YGF Company's cost of sales are averages 60% of revenues. The inventory policy is to carry 25% of next month's sales needs. April 1 inventory will be as expected under the policy. YGF Company pays for purchases 56% in the month of purchase and the remaining amount in the following month. Accounts Payable on April 1 are $90,000.
a. Prepare a purchases budget for as many months as is possible.
b. Prepare a cash payments budget for April through June.
c. Prepare a cash receipts budget for April through June.
