Complete three classmates responses


Green Lighting Supply plans inventory levels (at cost) at the end of each month as follows:

May, $271,000; June, $226,000; July, $209,000; and August, $241,000.

Sales are expected to be June, $449,000; July, $359,000; and August, $306,000. Cost of goods sold is 65% of sales.

Purchases in April were $258,000 and in May they were $188,000. Payments for each month’s purchases are made as follows: 15% during that month, 70% the next month, and the final 15% the next month.

Prepare budget schedules for June, July, and August for purchases and for disbursements for purchases.

April May June July August
Total Purchases budget
Ending inventory 226,000 209,000 241,000
Cost of goods sold, 65% of sales 291,850 233,350 198,900
Total needed 517,850 442,350 439,900
Beginning inventory 271,000 226,000 209,000
Purchases 258,000 188,000 246,850 216,350 230,900
Total Disbursements for Purchases
15% of this month’s purchases 37,027.50 32,452.50 34,635.00
70% of last month’s purchases 131,600.00 172,795.00 151,445.00
15% of second-last month’s Purchases  38,700.00 28,200.00 37,027.50
Total  207,327.50 233,447.50 223,107.50


6-31 Sales Budget

A Sendai clothing wholesaler was preparing its sales budget for the first quarter of 20X8.  Forecast sales are as follows (all values are in thousands of yen).

January:  203,000
February:  227,000
March:  248,000

Sales are 40% cash and 60% credit.  55% of the credit accounts are collected in the month of sale, 35% in the month following the sale, and 10% in the following month.  No uncollectable accounts are anticipated.  Accounts receivable at the beginning of 20X8 are 82,950 (10% of November credit sales of 140,000 and 4% of December credit sales of 151,000).

Prepare a schedule showing sales and cash collections for January, February, and March, 20X8.

Above are the two schedules.  For the sales budget schedule, I used simple calculations to break out cash (40%) and credit (60%) accordingly.  For the cash collections from customer’s schedule, I used formulas to determine the appropriate amounts.  For cash sales, I used the cash totals from the sales budget schedule and added 55% of the current month’s credit totals as well.  For collections from previous months, I used 35% of the previous month’s credit totals and added 10% of the previous-previous month’s credit totals.


Sales Budget




Credit Sales, 60%

 ¥  121,800 

 ¥  136,200 

 ¥  148,800 

Cash Sales, 40%

 ¥  81,200 

 ¥  90,800 

 ¥  99,200 

Total Sales

 ¥  203,000 

 ¥  227,000 

 ¥  248,000 

Cash Collections from   Customers




Cash Sales

 ¥  148,190 

 ¥  165,710 

 ¥  181,040 

Collections from Prior Months

 ¥  67,850 

 ¥  57,730 

 ¥  59,850 

Total Collections

 ¥  216,040 

 ¥  223,440 

 ¥  240,890 

I used an excel spreadsheet to help me calculate the sales budget and cash collections schedules.  For the sales budget, I plugged in the total amount of sales in both lines and then went back to create an equation by multiplying the sales amount by either 40% for the cash line and 60% for the credit line.  

The cash collections schedule took more time and thought to make sure I was entering the right month’s information and percentage into each cell’s equation.  To figure the cash sales for the cash collections schedule, I just copied and pasted the 40% cash information from the sales budget and added 55% of the credit sales for the same month.  To figure the collections from prior months, I created an equation to add 35% of the previous months credit sales and 10% of two months prior’s  credit sales.

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