Question

Jordan, Inc. sells fireworks. The company’s marketing director developed the following cost of goods sold budget...

Jordan, Inc. sells fireworks. The company’s marketing director developed the following cost of goods sold budget for April, May, June, and July.

April May June July
Budgeted cost of goods sold $64,000 $74,000 $84,000 $90,000

Jordan had a beginning inventory balance of $2,900 on April 1 and a beginning balance in accounts payable of $14,100. The company desires to maintain an ending inventory balance equal to 20 percent of the next period’s cost of goods sold. Jordan makes all purchases on account. The company pays 65 percent of accounts payable in the month of purchase and the remaining 35 percent in the month following purchase.  

Required

Prepare an inventory purchases budget for April, May, and June.

Determine the amount of ending inventory Jordan will report on the end-of-quarter pro forma balance sheet.

Prepare a schedule of cash payments for inventory for April, May, and June.

Determine the balance in accounts payable Jordan will report on the end-of-quarter pro forma balance sheet.

Homework Answers

Answer #1
Inventory purchases budget :
April May June
B COGS 64000 74000 84000
Des End Inv 14800 16800 18000
Total reqd 78800 90800 102000
Less: Op Inv 2900 14800 16800
Inv to purchase 75900 76000 85200
Amount of ending inventory to report in B/s: $18000
Cash payment to Inventory :
April May June
Purchases 75900 76000 85200
Payt of Mar 14100
Apr 49335 26565
May 49400 26600
Jun 55380
Total payment 63435 75965 81980
Balance in AP at the end of quarter: =85200*0.35=$29820
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Adams, Inc. sells fireworks. The company’s marketing director developed the following cost of goods sold budget...
Adams, Inc. sells fireworks. The company’s marketing director developed the following cost of goods sold budget for April, May, June, and July. April May June July Budgeted cost of goods sold $69,000 $79,000 $89,000 $95,000 Adams had a beginning inventory balance of $4,500 on April 1 and a beginning balance in accounts payable of $14,300. The company desires to maintain an ending inventory balance equal to 10 percent of the next period’s cost of goods sold. Adams makes all purchases...
Zachary, Inc. sells fireworks. The company’s marketing director developed the following cost of goods sold budget...
Zachary, Inc. sells fireworks. The company’s marketing director developed the following cost of goods sold budget for April, May, June, and July. April May June July Budgeted cost of goods sold $79,000 $89,000 $99,000 $105,000 Zachary had a beginning inventory balance of $4,000 on April 1 and a beginning balance in accounts payable of $15,700. The company desires to maintain an ending inventory balance equal to 15 percent of the next period’s cost of goods sold. Zachary makes all purchases...
Finch Company sells lamps and other lighting fixtures. The purchasing department manager prepared the following inventory...
Finch Company sells lamps and other lighting fixtures. The purchasing department manager prepared the following inventory purchases budget. Finch’s policy is to maintain an ending inventory balance equal to 15 percent of the following month’s cost of goods sold. April’s budgeted cost of goods sold is $76,000. Required Complete the inventory purchases budget by filling in the missing amounts. Determine the amount of cost of goods sold the company will report on its first quarter pro forma income statement. Determine...
Metro, Inc. sells backpacks. The Company's accountant is preparing the purchases budget for the first quarter...
Metro, Inc. sells backpacks. The Company's accountant is preparing the purchases budget for the first quarter operations. Metro maintains ending inventory at 20% of the following month's expected cost of goods sold. Expected cost of goods sold for April is $82,000. All purchases are made on account with 25% of accounts paid in the month of purchase and the remaining 75% paid in the month following the month of purchase. Sales January February March Budgeted cost of goods sold $...
Campbell Company, which sells electric razors, had $330,000 of cost of goods sold during the month...
Campbell Company, which sells electric razors, had $330,000 of cost of goods sold during the month of June. The company projects a 9 percent increase in cost of goods sold during July. The inventory balance as of June 30 is $35,000, and the desired ending inventory balance for July is $36,000. Campbell pays cash to settle 75 percent of its purchases on account during the month of purchase and pays the remaining 25 percent in the month following the purchase....
Deacon Company is a merchandising company that is preparing a budget for the three-month period ended...
Deacon Company is a merchandising company that is preparing a budget for the three-month period ended June 30th. The following information is available Deacon Company Balance Sheet March 31 Assets Cash $ 55,000 Accounts receivable 36,000 Inventory 40,000 Buildings and equipment, net of depreciation 100,000 Total assets $ 231,000 Liabilities and Stockholders’ Equity Accounts payable $ 51,300 Common stock 70,000 Retained earnings 109,700 Total liabilities and stockholders’ equity $ 231,000 Budgeted Income Statements April May June Sales $ 100,000 $...
The following data relate to the operations of Soper Company, a wholesale distributor of consumer goods...
The following data relate to the operations of Soper Company, a wholesale distributor of consumer goods as of March 31:   Cash $ 8,000   Accounts receivable 20,000   Inventory 36,000   Building and equipment, net 120,000   Accounts payable 21,750   Common shares 150,000   Retained earnings 12,250 a. The gross margin is 25% of sales. b. Actual and budgeted sales data are as follows:   March (actual) $ 50,000   April $ 60,000   May $ 72,000   June $ 90,000   July $ 48,000 c. Sales are 60% for...
The following data relate to the operations of Soper Company, a wholesale distributor of consumer goods...
The following data relate to the operations of Soper Company, a wholesale distributor of consumer goods as of March 31:   Cash $ 8,000   Accounts receivable 20,000   Inventory 36,000   Building and equipment, net 120,000   Accounts payable 21,750   Common shares 150,000   Retained earnings 12,250 a. The gross margin is 25% of sales. b. Actual and budgeted sales data are as follows:   March (actual) $ 50,000   April $ 60,000   May $ 72,000   June $ 90,000   July $ 48,000 c. Sales are 60% for...
Quagmire Inc. has prepared the following sales budget for the quarter of April, May and June:...
Quagmire Inc. has prepared the following sales budget for the quarter of April, May and June: Sales Budget April May June Total Sales in units 12600 16800 14400 43800 Selling price per unit x $60 x $60 x $60 Sales revenue $756000 $1008000 $864000 $2628000 All of the sales are on credit. Quagmire collects from customers as follows: 45% of sales in the month of sale 25% in the month following the sale, and 30% in the second month following...
Production Budget Aqua-pro Inc. produces submersible water pumps for ponds and cisterns. The unit sales for...
Production Budget Aqua-pro Inc. produces submersible water pumps for ponds and cisterns. The unit sales for selected months of the year are as follows: Unit Sales April 216,000 May 264,000 June 240,000 July 288,000 Company policy requires that ending inventories for each month be 25% of next month's sales. However, at the beginning of April, due to greater sales in March than anticipated, the beginning inventory of water pumps is only 21,000. Required: Prepare a production budget for the second...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT