Jiffy Company has budgeted purchases of merchandise inventory of $454,000 in January and $533,000 in February. Assume Jiffy pays for inventory purchases 70% in the month of purchase and 30% in the month after purchase. The Accounts Payable balance on December 31 is $97,425. Prepare a schedule of cash payments for purchases for January and February, including the calculation for the Accounts Payable balance on February 28. Begin by computing the total cash payments for direct materials for January and February. Then, compute the Accounts Payable balance at February 28 (Round all amounts you enter into the budget to the nearest whole dollar. If an input field is not used in the table leave the input field empty, do not enter a zero.) Cash Payments Total merchandise inventory purchases Cash Payments January January February February

Jiffy Company has budgeted purchases of merchandise inventory of $454,000 in January and $533,000 in February. Assume Jiffy pays for inventory purchases 70% in the month of purchase and 30% in the month after purchase. The Accounts Payable balance on December 31 is $97,425. Prepare a schedule of cash payments for purchases for January and February, including the calculation for the Accounts Payable balance on February 28. Begin by computing the total cash payments for direct materials for January and February. Then, compute the Accounts Payable balance at February 28 (Round all amounts you enter into the budget to the nearest whole dollar. If an input field is not used in the table leave the input field empty, do not enter a zero.) Cash Payments Total merchandise inventory purchases Cash Payments January January February February

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter7: Budgeting

Section: Chapter Questions

Problem 9EB: Cash collections for Renew Lights found that 65% of sales were collected in the month of sale, 25%...

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Concept explainers

Master Budget

A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.

Sales Budget and Selling

A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.

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Total merchandise inventory purchases
Cash Payments
Merchandise Inventory:
Dec.-Dec. 31 Accounts Payable, paid in Jan.
Jan. Jan. merchandise inventory purchases paid in Jan.
Jan. Jan. merchandise inventory purchases paid in Feb.
Feb.-Feb. merchandise inventory purchases paid in Feb.
Total payments for merchandise inventory
January
January
February
February

Jiffy Company has budgeted purchases of merchandise inventory of $454,000 in January and $533,000 in February. Assume Jiffy pays for inventory
purchases 70% in the month of purchase and 30% in the month after purchase. The Accounts Payable balance on December 31 is $97,425. Prepare a
schedule of cash payments for purchases for January and February, including the calculation for the Accounts Payable balance on February 28.
Begin by computing the total cash payments for direct materials for January and February. Then, compute the Accounts Payable balance at February 28.
(Round all amounts you enter into the budget to the nearest whole dollar. If an input field is not used in the table leave the input field empty, do not enter
a zero.)
Cash Payments
Total merchandise inventory purchases
Cash Payments
January
January
February
February
D

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