Question 2 (12 marks)
Assume that you are the accounts executive for Stallone Pte Ltd (“Stallone”), an online retailer which sells canned abalone purchased from an overseas supplier.
The following information is available for Stallone:
Forecast Sales Volume is shown below:
Assume that the cost price of each canned abalone is 20% of the selling price, and the cost and selling price remains unchanged from February to April 2024.
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70% of each month’s sales are estimated to be cash sales collected within the same month. The remainder will be credit sales and will be received in the following month.
40% of the expenses relating to the purchase of canned abalone will be paid within the same month. The remainder will be credit purchases and will be paid in the following month.
Selling and Administrative Expenses are expected to remain constant at $1,000 per month and will be paid within the same month.
Beginning Cash for March 2024 is expected to be $12,000.
a) Conduct research to establish an appropriate selling price for one (1) canned abalone. State your assumption(s) and cite your source(s) clearly.
b) Prepare the following budgets for Stallone Pte Ltd for March 2024 based on the information above. You can use the templates below to answer this question.
Cash Receipt Budget,
Cash Disbursement Budget and
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