Question: The accountant at Supreme Audio resigned while he was in the midst of preparing the budget for 2018. His work papers indicated the following: Assumptions:

The accountant at Supreme Audio resigned while he was in the midst of preparing the budget for 2018. His work papers indicated the following:

Assumptions:
Sales will increase by 25 percent over 2017.
Cost of sales equals 75 percent of sales.
For 2018, ending inventory should equal 35 percent of the cost of sales for the next quarter.
Sales in the first quarter of 2019 will be $300,000.
Required
Fill in the missing information to determine the sales and purchases budgets for 2018.

Budgeted Sales and Inventory Purchases for 2018 Quarter 2 Quarter 3 Quarter 4 Quarter 1 Total Sales in 2017 Expected sales in 2018 Cost of sales Beginning inventory Ending inventory Purchases $256,000 $290,000 $1,214,000 $300,000 $368,000 $320,000 2$ $192,000 $ 69,500 24

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