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Managerial Accounting: Streuling EnterprisesAt March 31 Streuling Enterprises, a merchandising firm, had an inventory of 38,000 units, and it had accounts receivable totaling $85,000. Sales, in units, have been budgeted as follows for the next four months:April 60,000May 75,000June 90,000July 81,000Streuling’s board of directors has established a policy to commence in April that the inventory at the end of each month should contain 40% of the units required for the following month’s budgeted sales.The selling price is $2 per unit. One-third of sales are paid for by customers in the month of the sale, the balance is collected in the following month.Required:a. Prepare a merchandise purchases budget showing how many units should be purchased for each of the months April, May, and June.b. Prepare a schedule of expected cash collections for each of the months April, May, and June.
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