The following is data from Star Company, which is a distributor of soap products:

March 31
Cash	$16.000.000
Accounts receivable	$40.000.000
Inventory	$72.000.000
Building and equipment, net	$240.000.000
Accounts payable	$44.000.000
Capital stock	$300.000.000
Retained earnings	$24.000.000

Gross margin is 25% of sales. Actual and budgeted sales data:

March (actual)	$100.000.000
April	$120.000.000
May	$144.000.000
June	$180.000.000
July	$96.000.000

90% cash receipts from sales and 10% credit. Repayment of credit sales will be received in the following month. The accounts receivable (March 31) is the result of credit sales in March.

Every month ending inventory 70% of the budgeted cost of goods sold in the following month. Inventory is purchased with 50% cash in that month while the remaining 50% will be paid in the following month. Accounts payable (March 31) is the result of purchasing an inventory in March.

Using previous data:
a. Create a schedule of expected cash collections for April, May, and June, and for the quarter in total.
b. Complete the following budget:

Merchandise Purchases Budget
April	May	June	Quarter
Budgeted cost of goods sold
Ending inventory
Total needs
Beginning inventory
Required purchases

c. Make a schedule of expected cash disbursements - merchandise purchases for the months of April, May, and June and for the quarter in total.
d. Start-Up companies need to hire a financial professional. You are hired as a part time CFO. You must prepare a cash flow forecasting system. Give  and explain your description of how to handle this task. 

Note: The solution shows the correct and structured calculations and is supported by a comprehensive discussion

Thank you very much!

Answer rating: 100% (QA)

a Schedule of expected cash collections for April May and June and for the quarter in total April Ma... View the full answer