Peabody, 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 April May June $73,000 $83,000 $93,000 Peabody had a beginning inventory balance of $2,600 on April 1 and a beginning balance in accounts payable of $14,500. The company desires to maintain an ending inventory balance equal to 15 percent of the next period's cost of goods sold. Peabody makes all purchases on account. The company pays 65 percent of accounts payable in the month of purchase and the remaining 35 percent in the month following purchase. Required a. Prepare an inventory purchases budget for April, May, and June. Inventory Purchases Budget Budgeted cost of goods sold Inventory needed July $99,000 Required purchases (on account) April May June $ 73,000 $83,000 $ 93,000 b. Determine the amount of ending inventory Peabody will report on the end-of-quarter pro forma balance sheet.

Peabody, 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 April May June $73,000 $83,000 $93,000 Peabody had a beginning inventory balance of $2,600 on April 1 and a beginning balance in accounts payable of $14,500. The company desires to maintain an ending inventory balance equal to 15 percent of the next period's cost of goods sold. Peabody makes all purchases on account. The company pays 65 percent of accounts payable in the month of purchase and the remaining 35 percent in the month following purchase. Required a. Prepare an inventory purchases budget for April, May, and June. Inventory Purchases Budget Budgeted cost of goods sold Inventory needed July $99,000 Required purchases (on account) April May June $ 73,000 $83,000 $ 93,000 b. Determine the amount of ending inventory Peabody will report on the end-of-quarter pro forma balance sheet.

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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