Exercise 14-9A (Algo) Determining the amount of expected inventory purchases and cash payments LO 14-3 Rooney Company, which sells electric razors, had $350,000 of cost of goods sold during the month of June. The company projects a 8 percent increase in cost of goods sold during July. The inventory balance as of June 30 is $25,000, and the desired ending inventory balance for July is $26,000 Rooney pays cash to settle 75 percent of its purchases on account during the month of purchase and pays the remaining 25 percent in the month following the purchase. The accounts payable balance as of June 30 was $43,000. Required a. Determine the amount of purchases budgeted for July b. Determine the amount of cash payments budgeted for inventory purchases in July Budgeted purchases b Cash payments

Exercise 14-9A (Algo) Determining the amount of expected inventory purchases and cash payments LO 14-3 Rooney Company, which sells electric razors, had $350,000 of cost of goods sold during the month of June. The company projects a 8 percent increase in cost of goods sold during July. The inventory balance as of June 30 is $25,000, and the desired ending inventory balance for July is $26,000 Rooney pays cash to settle 75 percent of its purchases on account during the month of purchase and pays the remaining 25 percent in the month following the purchase. The accounts payable balance as of June 30 was $43,000. Required a. Determine the amount of purchases budgeted for July b. Determine the amount of cash payments budgeted for inventory purchases in July Budgeted purchases b Cash payments

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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SALES PROJECTIONS Wilson Sports basketball sales in August were 152,000 units. Sales are expected to grow by 1.5% in September. October sales are expected to be 1,000 units less than in September. November sales will be 19% more than October. The selling price of the basketballs will remain the same $30 per unit. December sales projection is 157.000 units. INVENTORY POLICIES FINISHED GOODS MAINTAIN AND ENDING INVENTORY EQUAL TO 25% OF NEXT MONTH SALES ACTUAL BEGINNING INVENTORY 38,500 UNITS DIRECT MATERIALS MAINTAIN AND ENDING INVENTORY EQUAL TO 30% OF NEXT MONTH PRODUCTION ACTUAL BEGINNING INVENTORY 9,000 POUNDS The cost of materials purchased in August were $210,000 REQUIREMENTS Each basketball requires 25 pounds of materials at a cost of $7 per pound. December production are projected to be 156,000 units Each basketball requires 15 minutes of labor at a rate of $12.00 per hour Fixed Overhead is $400,000 monthly and variable overhead is assigned as 130% of direct labor SELLING AND…
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Required: 1. Compute estimated ending inventory and cost of goods sold for March applying the conventional retail method. Note: Round ratio calculation to 2 decimal places (i.e., 0.1234 should be entered as 12.34%.). Enter amounts to be deducted with a minus sign. Beginning inventory Purchases Freight-in Purchase returns Net markups Net markdowns Goods available for sale Cost-to-retail percentage (conventional retail method) Normal breakage Net sales: Sales Employee discounts Estimated ending inventory at retail Estimated ending inventory at cost Estimated cost of goods sold $ Cost 54,000 $ 221,000 18,358 293,358 $ Retail 74,000 414,000 7,200 495,200 495,200 495,200 Cost-to-Retail Ratio %
Inventory Analysis A company reports the following: Cost of merchandise sold $569,400 Average merchandise inventory 87,600 Determine (a) the inventory turnover and (b) the number of days' sales in inventory. Round interim calculations to the nearest dollar and final answers to one decimal place. Assume 365 days a year. a. Inventory turnover fill in the blank 1 b. Number of days' sales in inventory fill in the blank 2 days
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repruary 6,300 6,100 5,500 March April May Wesley's ending finished goods inventory policy is 25 percent of the next month's sales. Suppose each handisaw takes approximately 0.60 hours to manufacture, and Wesley pays an average labor wage of $26 per hour. Each handisaw requires a plastic housing that Wesley purchases from a supplier at a cost of $6.00 each. The company has an ending direct materials inventory policy of 20 percent of the following month's production requirements. Materials other than the housing unit total $4.50 per handisaw. Manufacturing overhead for this product includes $72,000 annual fixed overhead (based on production of 27,000 units) and $1.20 per unit variable manufacturing overhead. Wesley's selling expenses are 7 percent of sales dollars, and administrative expenses are fixed at $18,000 per month. Required: Compute the following for the first quarter: (Round your intermediate calculations to nearest whole dollar.) January February March 1st Quarter total 1.…
Problem 3 * Dette, Inc. estimates the cost ofits physical inventory at March 31 for use in an interim financial statement. The rate of markup on cost is 25%. The following account balances are available: Inventory, March 1 Purchases Purchase returns Sales during March The estimate of the cost of inventory on March 31 would be Your answer 220,000 172,000 8,000 300,000
Sales revenue First Quarter $ 15,800 Second Quarter $21,300 Cost of goods sold Beginning inventory Purchases $ 5,200 $ 4,700 3,800 13,200 Goods available for sale 9,000 17,900 Ending inventory 4,700 10,000 Cost of goods sold Gross profit 4,300 11,500 7,900 13,400 Expenses 6,300 Pretax income 5,800 $ 5,700 $ 7,100 During the third quarter, it was discovered that the ending Inventory for the first quarter should have been $5,180. Required: 1. What effect did this error have on the combined pretax Income of the two quarters? 2. Which quarter's or quarters' (if any) EPS amounts were affected by this error? 3. Prepare corrected Income statements for each quarter. 4. Prepare the schedule to reflect the comparative effects of the correct and Incorrect amounts on the Income statement. Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Prepare the schedule to reflect the comparative effects…
question 2 The following information pertains to Monroe Company: Month Sales Purchases January $62,000 $33,000 February $84,000 $42,000 March $101,000 $61,000 Cash is collected from customers in the following manner: Month of the sale: 65%, with the remainder the month after. 40% of purchases are paid for in cash in the month of purchase, and the balance is paid the following month. Labor costs are 35% of sales. Other operating costs are $38,000 per month (including $10,000 of depreciation). Both of these are paid in the month incurred. The cash balance on March 1 is $8,000. A minimum cash balance of $6,000 is required at the end of the month. Money can be borrowed in multiples of $1,000. How much cash will be disbursed in total in March?
Question: 129 A company plans to purchase inventory for the second half of 2014 as follows: July $ 1,00,000 August $ 75,000 September $ 2,25,000 October $1,25,000 November $ 2,50,000 December $ 30,000 They usually pay 50% of inventory purchases in the month of purchase, 35% in the following month, and 15% in the second month. Based on the information, what are the forecasted December cash payments? a. $15,000 b. $18,750 c. $87,500 d. $121,250
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