Walker Company prepares monthly budgets
1. Walker Company prepares monthly budgets. The current budget plans for a September ending inventory of 28,500 units. Company policy is to end each month with merchandise inventory equal to a specified percent of budgeted sales for the following month. Budgeted sales and merchandise purchases for the next three months follow.(1) Prepare the merchandise purchases budget for the months of July, August, and September.WALKER COMPANYMerchandise Purchases BudgetFor July, August, and SeptemberJulyAugustSeptemberBudgeted ending inventory units28,500Required units of available inventoryUnits to be purchased198,000300,000283,500(2) Compute the ratio of ending inventory to the next month’s sales.JulyAugustSeptemberBudgeted ending inventory units28,500Next month’s budgeted salesRatio of inventory to next month’s sales(3) How many units are budgeted for sale in October?Units budgeted for sale in OctoberSales (Units)Purchases (Units) July180,000198,000 August300,000300,000 September300,000283,500
