Solution-Prepare a schedule of cash collections for months

Prepare a schedule of cash collections for months of april

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Reference no: EM132515758

At March 31, Sturm Enterprises had 38,000 units in finished goods inventory and accounts receivable of $85,000.

Sales in units have been budgeted as follows:

Month Units

April 60,000

May 75,000

June 90,000

July 81,000

Sturm has just established a policy that finished goods inventory at the end of each month should be 40% of the units required for the following month's sales. Additional assumptions are as follows:

The sales price will be $2 per unit.
All sales will be on account (i.e. no cash sales). One third of all sales will be collected in the month of sale with the balanced collected in the following month.

REQUIRED:

Question a. Prepare a production budget for the months of April and May.

Question b. Prepare a schedule of cash collections for the months of April and May.

Reference no: EM132515758

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Prepare a schedule of cash collections for months of april

Reference no: EM132515758

Reference no: EM132515758

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