1. The Hurley Company's actual November and December unit sales and estimated unit sales for the following four months are as follows:
2.      November: 6700
3.      December: 9800
4.      January: 6200
5.      February: 8900
6.      March: 6600
7.      April: 7100
8.  
9. The company's inventory policy is to hold enough inventory at the end of the month to meet 30% of next month's sales requirements. Each inventory item costs $1.75. Cash disbursement on purchases is made as follows: 40% is paid in the month of purchase and 60% is paid in the month following purchase.
10.  
11. Each item sells for $4.00 and cash collection patterns are as follows:
12.      % of sales made for cash: 20%
13.  
14.      credit sales are collected as follows -
15.           In the month of sale: 35%
16.           In the month following sale: 40%
17.           In the second month following the sale: 23%
18.           Never collected: 2%
19.  
20. Required
21. Estimate the purchases (in units) for the months of January through March.
22.  
23. Estimate the cash disbursements on purchases for the months of January through March. What is the accounts payable balance at the end of March?
24.  
25. Estimate the cash collections for the months of January through March. What is the accounts receivable balance at the end of March?     

Answer rating: 100% (QA)

Answer a Particulars Jan Feb Mar Sales 620000 890000 660000 Closing Inventory 30 of next month 267000 198000 213000 Total Requirement 887000 1088000 8... View the full answer