In: Accounting
Tonka toys manufactures a toy truck called “Big Red” that they distribute to retailers. The company is now planning for the third quarter of 2020. In order to keep production and shipments moving smoothly, the company has the following inventory requirements:
Budgeted Sales (units)
April 30,000
May 35,000
June 39,000
July 40,000
August 50,000
September 70,000
October 35,000
November 20,000
December 10,000
30% are collected in the month of sale
40 % are collected in the month following the sale
20 % are collected two months after the sale
5% are collected three months after the sale
The remaining 5% are bad debts.
Required: