Urgent help

READ POINT NO. (d) 

"d) Budgeted sales of each month are purchased and paid for in the preceding month;"

Means for sale in February excel limited have purchased in january and sales price is 25% above cost ie. 125% of cost as given in point no. (c)

hence for January Cash outflow for purchases is:
(1,40,000*100/125) = 112000

in this way we will get purchase of each month.


that's why they have given sales of july so that we can calculate purchase price of june