1- Suppose receipts of $20,000 are moved from March to April. (March receipts are now planned...

1- Suppose receipts of $20,000 are moved from March to April. (March receipts are now planned at $94,999 while April receipts are planned at $110,210.)

- What change would this have on the total season’s receipt plan?

- What change would this have on the total season’s average stock and turnover?

Solutions

Expert Solution

there can be two assumptions in this case.

1) season ends with March

2) season does not end with March and both April and March falls in the same season

In case of 1st assumption total March season's receipts will fall short of $20000and total of April sesason' s receipts will go up by $20000.

In case of 2nd assumption there will be no change on the total season's receipt plan as total receipts of March and April falls in the same season.

If we assume business is on cash and carry basis there will be no change on total season's average stock and turnover in case of both assumptions

If business is on credit basis then in case of first assumption average stock will go down and turnover will be inflated for March season and opposite for April season

If business is on credit basis then in case of 2nd assumption there will be no change in average stock and turnover .

ekkarill92 answered 5 months ago

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