Vernon, Inc. sells fireworks. The company's marketing director developed the following cost of goods sold budget...
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Vernon, Inc. sells fireworks. The company's marketing director developed the following cost of goods sold budget for April, May, June. and July April S66,000 Hay $76,000 June $86,000 July $92,000 Budgeted cost of goods sold Vernon had a beginning inventory balance of $3,000 on April 1 and a beginning balance in accounts payable of $14,600. The company desires to maintain an ending inventory balance equal to 15 percent of the next period's cost of goods sold. Vernon 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 a. Prepare an inventory purchases budget for April, May, and June b. Determine the amount of ending inventory Vernon will report on the end-of quarter pro forma balance sheet c. Prepare a schedule of cash payments for inventory for April, May, and June d. Determine the balance in accounts payable Vernon will report on the end-of-quarter pro forma balance sheet Prepare an inventory purchases budget for April, May, and June. Inventory Purchases Budget April May $66.000 S 76.000 S 86,000 12.900 88 900 June Budgeted cost of goods sold Pus Desired ending inventory Inventory needed Less Beginning inventory Required purchases (on account) 11.400 13.800 77.400 99.000 5 77.400 S 88,900 S99,600 Vernon, Inc. sells fireworks. The company's marketing director developed the following cost of goods sold budget for April, May, June. and July April S66,000 Hay $76,000 June $86,000 July $92,000 Budgeted cost of goods sold Vernon had a beginning inventory balance of $3,000 on April 1 and a beginning balance in accounts payable of $14,600. The company desires to maintain an ending inventory balance equal to 15 percent of the next period's cost of goods sold. Vernon 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 a. Prepare an inventory purchases budget for April, May, and June b. Determine the amount of ending inventory Vernon will report on the end-of quarter pro forma balance sheet c. Prepare a schedule of cash payments for inventory for April, May, and June d. Determine the balance in accounts payable Vernon will report on the end-of-quarter pro forma balance sheet Prepare an inventory purchases budget for April, May, and June. Inventory Purchases Budget April May $66.000 S 76.000 S 86,000 12.900 88 900 June Budgeted cost of goods sold Pus Desired ending inventory Inventory needed Less Beginning inventory Required purchases (on account) 11.400 13.800 77.400 99.000 5 77.400 S 88,900 S99,600
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Fundamental Managerial Accounting Concepts
ISBN: 978-1259569197
8th edition
Authors: Thomas Edmonds, Christopher Edmonds, Bor-Yi Tsay, Philip Olds
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