Mulligan Fruits Corporation wholesales peaches and oranges. Kimberly Priest is working with the companys accountant to prepare

Mulligan Fruits Corporation wholesales peaches and oranges. Kimberly Priest is working with the company’s accountant to prepare next year’s budget. Ms. Priest estimates that sales will increase 5 percent for peaches and 10 percent for oranges. The current year’s sales revenue data follow.

Based on the company’s past experience, cost of goods sold is usually 60 percent of sales revenue. Company policy is to keep 10 percent of the next period’s estimated cost of goods sold as the current period’s ending inventory.

Required
a. Prepare the company’s sales budget for the next year for each quarter by individual product.
b. If the selling and administrative expenses are estimated to be $700,000, prepare the company’s budgeted annual income statement.
c. Ms. Priest estimates next year’s ending inventory will be $20,000 for peaches and $40,000 for oranges. Prepare the company’s inventory purchases budgets for the next year, showing quarterly figures byproduct.

Transcribed Image Text:

First Quarter Second Quarter Third Quarter Fourth Quarter Total Peaches $160,000 $200,000 $320,000 280,000 $960,000 Oranges 400,000 Total $560,000 $650,000 890,000 0,00 $2,760,000 450,000 570,000 380,000