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Carmen Company sells jar candles. The sales forecast (units) for the coming months is April May June July August 178 140 270 230 230 Each candle costs $11. The ending inventory policy is 40% of next month's sales needs. April 1 inventory will be as expected under the policy. Carmen pays for purchases 30% in the month of purchase and 70% the following month. Accounts payable on April 1 is $2,600. Required: a. Prepare a purchases budget for the quarter ending June 30, Note: Deductible values must be indicated with a minus sign. Merchandise Purchases Budget (Candles) For the Ouattor Ending I

Carmen Company sells jar candles. The sales forecast (units) for the coming months is April May June July August 178 140 270 230 230 Each candle costs $11. The ending inventory policy is 40% of next month's sales needs. April 1 inventory will be as expected under the policy. Carmen pays for purchases 30% in the month of purchase and 70% the following month. Accounts payable on April 1 is $2,600. Required: a. Prepare a purchases budget for the quarter ending June 30, Note: Deductible values must be indicated with a minus sign. Merchandise Purchases Budget (Candles) For the Ouattor Ending I

FINANCIAL ACCOUNTING
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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Carmen Company sells jar candles. The sales forecast (units) for the coming months is April May June July August 178 140 270 230 230 Each candle costs $11. The ending inventory policy is 40% of next month's sales needs. April 1 inventory will be as expected under the policy. Carmen pays for purchases 30% in the month of purchase and 70% the following month. Accounts payable on April 1 is $2,600. Required: a. Prepare a purchases budget for the quarter ending June 30, Note: Deductible values must be indicated with a minus sign. Budgeted unit sales Plus: Ending inventory Less: Beginning inventory Budgeted purchases (units)) Cost of merchandise (per unit) Total cost of merchandise purchases Merchandise Purchases Budget (Candles) For the Quarter Ending June 30 April May b. Prepare a cash payments budget for the quarter ending June 30. Budgeted merchandise purchases Cash paid month of purchase (30%) Cash paid in month following (70%) Cash paid for merchandise purchases Budgeted Cash Payments (Candles) For the Quarter Ending June 30 April May June June Total Total
Transcribed Image Text:Carmen Company sells jar candles. The sales forecast (units) for the coming months is April May June July August 178 140 270 230 230 Each candle costs $11. The ending inventory policy is 40% of next month's sales needs. April 1 inventory will be as expected under the policy. Carmen pays for purchases 30% in the month of purchase and 70% the following month. Accounts payable on April 1 is $2,600. Required: a. Prepare a purchases budget for the quarter ending June 30, Note: Deductible values must be indicated with a minus sign. Budgeted unit sales Plus: Ending inventory Less: Beginning inventory Budgeted purchases (units)) Cost of merchandise (per unit) Total cost of merchandise purchases Merchandise Purchases Budget (Candles) For the Quarter Ending June 30 April May b. Prepare a cash payments budget for the quarter ending June 30. Budgeted merchandise purchases Cash paid month of purchase (30%) Cash paid in month following (70%) Cash paid for merchandise purchases Budgeted Cash Payments (Candles) For the Quarter Ending June 30 April May June June Total Total
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