Budgeted purchases; budgeted cash paymentsGrenfell Company is preparing a cash budget for the year for purchases of Calvos.Budgeted data are as follows:Cost of goods sold for the year$600,000Accounts payable, Jan. 140,000Inventory, Jan. 160,000Desired inventory, Dec. 3184,000Purchases will be made in 12 equal monthly amounts and paid for in the following month. Compute the budgeted cash payment for purchases of Calvos for the year.Budgeted cash payment: $Answer

The objective of the question is to calculate the budgeted cash payment for purchases of Calvos for…

Answered: Budgeted purchases; budgeted cash…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Budgeted purchases; budgeted cash payments
Grenfell Company is preparing a cash budget for the year for purchases of Calvos.
Budgeted data are as follows:

Cost of goods sold for the year	$600,000
Accounts payable, Jan. 1	40,000
Inventory, Jan. 1	60,000
Desired inventory, Dec. 31	84,000

Purchases will be made in 12 equal monthly amounts and paid for in the following month. Compute the budgeted cash payment for purchases of Calvos for the year.
Budgeted cash payment: $Answer

Definition Definition Estimate of an organization's cash flow for a future period. A cash budget forecasts future cash receipts and payments from various sources for a fiscal year. A cash budget can be created once a month or once a week to determine the organization's cash position and ensure its performance in relation to the budget. It aids in determining whether the company has enough cash and cash equivalents to meet its operational needs in the future.

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