Learning Objective: Estimate Purchases and Disbursements Kealy's Vintage Books purchases vintage books a month in advance...

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Learning Objective: Estimate Purchases and Disbursements Kealy's Vintage Books purchases vintage books a month in advance...

Learning Objective: Estimate Purchases and Disbursements
Kealy's Vintage Books purchases vintage books a month in advance of planned sales. Vintage books are purchased from wholesalers for $29 each (on average), using financing to pay 40% of the purchase in the month of delivery and the remaining 60% in the month of the sale. Kealy purchased 1000 books in April and has 800 books in stock at the end of the month. Estimated sales for May are 860 books, June are 700 books and July are 740 books. Estimate the purchases for May and June. Estimate cash payments for April and May.

Purchasing Budget

	May Units	June Units
Estimated sales
Add: Estimated ending inventory
Total merchandise needs
Less: Beginning inventory
Merchandise to be purchased

Disbursement Budget

	April	May
Estimated Payment for books ordered
Estimated Payment for books sold
Total Estimated Monthly Cash Payment

business accounting

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Answer 1

Answer #1

Purchasing Budget

	May Units	June Units
Estimated sales	860	700
Add: Estimated ending inventory (Next month sales)	700	740
Total merchandise needs	1560	1440
Less: Beginning inventory	800	700
Merchandise to be purchased	760	740

Disbursement Budget

	April		May
Estimated Payment for books ordered in the month of delivery(40%)	$ 11,600.00	10002940%	$ 8,816.00	7602940%
Estimated Payment for books in the month of books sold (60%)			$ 17,400.00	10002960%
Total Estimated Monthly Cash Payment	$ 11,600.00		$ 26,216.00

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Answer 2

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Learning Objective: Estimate Purchases and Disbursements Kealy's Vintage Books purchases vintage books a month in advance...

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