Question

Walker Company prepares monthly budgets. The current budget plans for a September ending merchandise inventory of...

Walker Company prepares monthly budgets. The current budget plans for a September ending merchandise inventory of 30,000 units. Company policy is to end each month with merchandise inventory equal to 15% of budgeted sales for the following month. Budgeted sales and merchandise purchases for the next three months follow. The company budgets sales of 200,000 units in October.

Sales (Units) Purchases (Units)
July 170,000 191,000
August 310,000 308,500
September 300,000 285,000

Prepare the merchandise purchases budgets for the months of July, August, and September.

WALKER COMPANY
Merchandise Purchases Budget
For July, August, and September
July August September
Budgeted ending inventory units 30,000
Budgeted units sales for month 170,000 310,000 300,000
Required units of available inventory 330,000
Beginning inventory (units)
Units to be purchased 191,000 308,500 285,000
Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Answer

Calculation of units to be purchased
July August September
Budgeted ending inventory 46500 45000 30000
Add :Budgeted unit sales for the month 170000 310000 300000
Required unit of avilable inventory 216500 355000 330000
Less:Beginning invetory in units 25500 46500 45000
Units to be purchased 191000 308500 285000
Explanations
Particulars July August September
Budgeted ending inventory (310000 x 15%) (300000 x 15%) 30000
46500 45000 Given in question
Beginning invetory in units (170000 x 15%) (310000 x 15%) (300000 x 15%)
25500 46500 45000
0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Macheski Company, an importer and retailer of Polish pottery and kitchenware, prepares a monthly master budget....
Macheski Company, an importer and retailer of Polish pottery and kitchenware, prepares a monthly master budget. Data for the July master budget are given below: The June 30th balance sheet follows: Cash $ 25,000 Accounts payable $ 45,000 Accounts receivable 110,000 Capital stock 300,000 Inventory 54,000 Retained earnings 94,000 Building and equipment (net) 250,000 Actual sales for June and budgeted sales for July, August, and September are given below: June $137,500 July 360,000 August 400,000 September 320,000 Sales are 20...
E22-28 Purchases and Cash Budgets On July 1, MTC Wholesalers had a cash balance of $175,000...
E22-28 Purchases and Cash Budgets On July 1, MTC Wholesalers had a cash balance of $175,000 and accounts payable of $99,000. Actual sales for May and June, and budgeted sales for July, August, September, and October are: Month Actual Sales. Month Budgeted Sales May $150,000 July $90,000 June 160,000 August 80,000 September 100,000 October 120,000 All sales are on credit with 75 percent collected during the month of sales, 20 percent collected during the next month, and 5 percent collected...
Wheeling Company is a merchandiser that provided a balance sheet as of September 30 as shown...
Wheeling Company is a merchandiser that provided a balance sheet as of September 30 as shown below: Wheeling Company Balance Sheet September 30 Assets Cash $ 78,600 Accounts receivable 102,000 Inventory 40,500 Buildings and equipment, net of depreciation 279,000 Total assets $ 500,100 Liabilities and Stockholders’ Equity Accounts payable $ 129,600 Common stock 216,000 Retained earnings 154,500 Total liabilities and stockholders’ equity $ 500,100 The company is in the process of preparing a budget for October and has assembled the...
Hardy Company’s cost of goods sold is consistently 60% of sales. The company plans ending merchandise...
Hardy Company’s cost of goods sold is consistently 60% of sales. The company plans ending merchandise inventory for each month equal to 30% of the next month’s budgeted cost of goods sold. All merchandise is purchased on credit, and 40% of the purchases made during a month is paid for in that month. Another 45% is paid for during the first month after purchase, and the remaining 15% is paid for during the second month after purchase. Expected sales are:...
Trago Company manufactures a single product and has a JIT policy that ending inventory must equal...
Trago Company manufactures a single product and has a JIT policy that ending inventory must equal 10% of the next month's sales. It estimates that May's ending inventory will consist of 30,000 units. June and July sales are estimated to be 300,000 and 310,000 units, respectively. Trago assigns variable overhead at a rate of $3.80 per unit of production. Fixed overhead equals $420,000 per month. Compute the number of units to be produced and use this amount to compute the...
Ahmed Company purchases all merchandise on credit. It recently budgeted the following month-end accounts payable balances...
Ahmed Company purchases all merchandise on credit. It recently budgeted the following month-end accounts payable balances and merchandise inventory balances. Cash payments on accounts payable during each month are expected to be: May, $1,400,000; June, $1,400,000; July, $1,250,000; and August, $1,300,000 Accounts Payable Merchandise Inventory May 31 $ 180,000 $ 250,000 June 30 160,000 300,000 July 31 300,000 400,000 August 31 180,000 300,000 (1) Compute the budgeted amounts of merchandise purchases. Budgeted amounts: June July August Ending accounts payable Payments...
Beech Corporation is a merchandising company that is preparing a master budget for the third quarter...
Beech Corporation is a merchandising company that is preparing a master budget for the third quarter of the calendar year. The company’s balance sheet as of June 30th is shown below: Beech Corporation Balance Sheet June 30 Assets Cash $ 83,000 Accounts receivable 126,000 Inventory 69,750 Plant and equipment, net of depreciation 220,000 Total assets $ 498,750 Liabilities and Stockholders’ Equity Accounts payable $ 81,000 Common stock 348,000 Retained earnings 69,750 Total liabilities and stockholders’ equity $ 498,750 Exercise 8-12...
Direct Materials Purchases Budget Langer Company produces plastic items, including plastic housings for humidifiers. Each housing...
Direct Materials Purchases Budget Langer Company produces plastic items, including plastic housings for humidifiers. Each housing requires about 19 ounces of plastic costing $0.16 per ounce. Langer molds the plastic into the proper shape. Langer has budgeted production of the housings for the next 4 months as follows: Units July 3,500 August 4,400 September 4,900 October 6,300 Inventory policy requires that sufficient plastic be in ending monthly inventory to satisfy 30% of the following month's production needs. The inventory of...
Milo Company manufactures beach umbrellas. The company is preparing detailed budgets for the third quarter and...
Milo Company manufactures beach umbrellas. The company is preparing detailed budgets for the third quarter and has assembled the following information to assist in the budget preparation: a.The Marketing Department has estimated sales as follows for the remainder of the year (in units): The selling price of the beach umbrellas is $12 per unit. July 40,500 October 30,500 August 91,000 November 17,000 September 60,000 December 17,500 b. All sales are on account. Based on past experience, sales are collected in...
Company B is a merchandising Company. Estimated sales for July, August, and September will be $200,000,...
Company B is a merchandising Company. Estimated sales for July, August, and September will be $200,000, $190,000, and $210,000, respectively. Each month’s ending inventory must equal 20% of the cost of next month’s sales. The average gross profit ration is 60%. The company pays for 40% of its merchandise purchase in the month of purchase and the remaining 60% in the month following the purchase. 1. How much is the budgeted merchandise purchase in August? 2. How much is the...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT