Gibson, Inc. sells fireworks. The company's marketing director developed the following cost of goods sold budget for April, May, June, and July. Budgeted cost of goods sold Gibson had a beginning inventory balance of $4,100 on April 1 and a beginning balance in accounts payable of $15,500. The company desires to maintain an ending inventory balance equal to 15 percent of the next period's cost of goods sold. Gibson makes all purchases on account. The company pays 70 percent of accounts payable in the month of purchase and the remaining 30 percent in the month following purchase. Required a. Prepare an inventory purchases budget for April, May, and June. b. Determine the amount of ending inventory Gibson will report on the end-of-quarter pro forma balance sheet c. Prepare a schedule of cash payments for inventory for April, May, and June. d. Determine the balance in accounts payable Gibson will report on the end-of-quarter pro forma balance sheet. April May June $72,000 $82,000 $92,000 Complete this question by entering your answers in the tabs below. July $98,000

Gibson, Inc. sells fireworks. The company's marketing director developed the following cost of goods sold budget for April, May, June, and July. Budgeted cost of goods sold Gibson had a beginning inventory balance of $4,100 on April 1 and a beginning balance in accounts payable of $15,500. The company desires to maintain an ending inventory balance equal to 15 percent of the next period's cost of goods sold. Gibson makes all purchases on account. The company pays 70 percent of accounts payable in the month of purchase and the remaining 30 percent in the month following purchase. Required a. Prepare an inventory purchases budget for April, May, and June. b. Determine the amount of ending inventory Gibson will report on the end-of-quarter pro forma balance sheet c. Prepare a schedule of cash payments for inventory for April, May, and June. d. Determine the balance in accounts payable Gibson will report on the end-of-quarter pro forma balance sheet. April May June $72,000 $82,000 $92,000 Complete this question by entering your answers in the tabs below. July $98,000

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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