Birchem Company, which sells electric razors, had $260,000 of cost of goods sold during the month of

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Birchem Company, which sells electric razors, had $260,000 of cost of goods sold during the month of June. The company projects a 5 percent increase in cost of goods sold during July. The inventory balance as of June 30 is $28,000, and the desired ending inventory balance for July is $29,000. Birchem pays cash to settle 80 percent of its purchases on account during the month of purchase and pays the remaining 20 percent in the month following the purchase. The accounts payable balance as of June 30 was $35,000.
Required
a. Determine the amount of purchases budgeted for July.
b. Determine the amount of cash payments budgeted for inventory purchases in July.

Ending Inventory
The ending inventory is the amount of inventory that a business is required to present on its balance sheet. It can be calculated using the ending inventory formula                Ending Inventory Formula =...
Accounts Payable
Accounts payable (AP) are bills to be paid as part of the normal course of business.This is a standard accounting term, one of the most common liabilities, which normally appears in the balance sheet listing of liabilities. Businesses receive...
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Survey of Accounting

ISBN: 978-0073379555

2nd edition

Authors: Edmonds, old, Mcnair, Tsay

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