Hi There,

Please help me with this question how to Prepare a merchandise purchases budget showing how many units should be purchased foreach of the months April, May, and June and how toPrepare a schedule of expected cash collections for each of the months April, May, and June.

A merchandising firm by the name of Star Wars Enterprises, had an inventory of 42,000 units on March 31, and it had accounts receivable totaling $83,500. Sales, in units, have been budgeted as follows for the next four months:

April 55,000

May 65,000

June 81,000

July 79,000

To be enforced in April, Star Wars board of directors has established a policy that states that the inventory at the end of each month should contain 35% of the units required for the following month's budgeted sales.$2.5 is the selling price per unit. One-Quarter of sales are paid for by customers in the month of the sale; the balance is collected in the following month.