Q1) At March 31 Sterling Enterprises, merchandising firm, had inventory of 38,000 units, and it had accounts receivable totaling $85,000. Sales, in units, have been budgeted as given for next four months:
April.................. 60,000
May...................75,000
June...................90,000
July.....................81,000
Sterling's board of directors has established policy to commence in April that inventory at the ending of month must contain 40% of units required for following month's budgeted sales.
Create a merchandise purchases budget illustrating how many units should be bought for each of months April, May, and June.