Executive officers of Thornton Company are wrestling with their budget for the next year. The following are two different sales estimates provided by two difference sources: First Second Third Fourth Quarter $485,000 658,000 Source of Estimate Sales manager Marketing consultant Quarter $381,000 Quarter $306,000 462,000 Quarter $281,000 419,000 511,000 Thornton's past experience indicates that cost of goods sold is about 65 percent of sales revenue. The company tries to maintain 15 percent of the next quarter's expected cost of goods sold as the current quarter's ending inventory. This year's ending inventory is $31,000. Next year's ending inventory is budgeted to be $32,000. Required a. Prepare an inventory purchases budget using the sales manager's estimate. b. Prepare an inventory purchases budget using the marketing consultant's estimate. Complete this question by entering your answers in the tabs below. Required A Required B Prepare an inventory purchases budget using the sales manager's estimate. (Round your final answers to nearest whole dollar amount.) First Quarter Second Quarter Third Quarter Fourth Quarter $ 381,000 $ 306,000 $ 281,000 $ 485,000 Sales Total inventory needed Required purchases O $ O $ %24
Executive officers of Thornton Company are wrestling with their budget for the next year. The following are two different sales estimates provided by two difference sources: First Second Third Fourth Quarter $485,000 658,000 Source of Estimate Sales manager Marketing consultant Quarter $381,000 Quarter $306,000 462,000 Quarter $281,000 419,000 511,000 Thornton's past experience indicates that cost of goods sold is about 65 percent of sales revenue. The company tries to maintain 15 percent of the next quarter's expected cost of goods sold as the current quarter's ending inventory. This year's ending inventory is $31,000. Next year's ending inventory is budgeted to be $32,000. Required a. Prepare an inventory purchases budget using the sales manager's estimate. b. Prepare an inventory purchases budget using the marketing consultant's estimate. Complete this question by entering your answers in the tabs below. Required A Required B Prepare an inventory purchases budget using the sales manager's estimate. (Round your final answers to nearest whole dollar amount.) First Quarter Second Quarter Third Quarter Fourth Quarter $ 381,000 $ 306,000 $ 281,000 $ 485,000 Sales Total inventory needed Required purchases O $ O $ %24
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Having an issue with this problem. A & B
Thank you
Transcribed Image Text:Executive officers of Thornton Company are wrestling with their budget for the next year. The following are two different sales
estimates provided by two difference sources:
First
Second
Third
Fourth
Quarter
$485,000
658,000
Source of Estimate
Sales manager
Marketing consultant
Quarter
$381,000
Quarter
$306,000
462,000
Quarter
$281,000
419,000
511,000
Thornton's past experience indicates that cost of goods sold is about 65 percent of sales revenue. The company tries to maintain 15
percent of the next quarter's expected cost of goods sold as the current quarter's ending inventory. This year's ending inventory is
$31,000. Next year's ending inventory is budgeted to be $32,000.
Required
a. Prepare an inventory purchases budget using the sales manager's estimate.
b. Prepare an inventory purchases budget using the marketing consultant's estimate.
Complete this question by entering your answers in the tabs below.
Required A
Required B
Prepare an inventory purchases budget using the sales manager's estimate. (Round your final answers to nearest whole dollar
amount.)
First Quarter Second Quarter Third Quarter Fourth Quarter
$
381,000 $
306,000 $
281,000 $
485,000
Sales
Total inventory needed
Required purchases
O $
O $
%24
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education