Master Budgets

E22A-33 (similar to) Question Help Sweeney, Inc. sells tire rims. Its sales budget for the nine mon ended September 30, 2016, follows: (Click the icon to view the budget.) In the past, cost of goods sold has been 40% of total sales. The director of marketing and the financial vice president agree that each quarter's ending inventory should not be below $14,000 plus 10% of cost of goods sold for the following quarter. The marketing director expects sales of $210,000 during the fourth quarter. The January 1 inventory was $20,000. Prepare an inventory, purchases, and cost of goods sold budget for each of the first three quarters of the year. Compute cost of goods sold for the entire nine-month period. Sweeney, Inc. Inventory, Purchases, and Cost of Goods Sold Budget Nine Months Ended September 30, 2016 Quarter Ended March 31 Cost of goods sold 1 Data Table X Plus: Desired ending merchandise in Total merchandise inventory required Less: Beginning merchandise inventory Quarter Ended Nine-Month Budgeted Purchases March 31 June 30 September 30 Total Cash sales, 30% $ 33,000 S 48,000 $ 40,500 $ 121,500 Credit sales, 70% 77,000 112,000 94.500 283,500 Total sales S 110,000 $ 160,000 $ 135,000 $ 405,000 Print Done