Question

Exercise 13-32 (Algo) Estimate Purchases and Cash Disbursements (LO 13-4, 5)

Midland Company buys tiles and prints different designs on them for souvenir and gift stores. It buys the tiles from a small company in Europe, so at all times it keeps on hand a stock equal to the tiles needed for three months’ sales. The tiles cost $1.00 each and must be paid for in cash. The company has 28,000 tiles in stock. Sales estimates, based on contracts received, are as follows for the next six months:

January		12,900
February		18,100
March		12,900
April		14,400
May		9,100
June		6,300

Required: Estimate purchases (in units) and cash required to make purchases in January, February, and March.

MIDLAND COMPANY - Merchandise Purchases Budget - For the Period Ended March 31

	January	February	March
Units to be purchased
Estimated Cost

Answer 1