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Perez Company, which sells electric razors, had $320,000 of cost of goods sold during the month of June. The company projects a 9 percent increase in cost of goods sold during July. The inventory balance as of June 30 is $24,000, and the desired ending inventory balance for July is $25,000. Perez 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 $28,000. Required a. Determine the amount of purchases budgeted for July. b. Determine the amount of cash payments budgeted for inventory purchases in July. Answer is complete but not entirely correct. a. Budgeted purchases b. Cash payments $ 349,800 $ 322,050

Perez Company, which sells electric razors, had $320,000 of cost of goods sold during the month of June. The company projects a 9 percent increase in cost of goods sold during July. The inventory balance as of June 30 is $24,000, and the desired ending inventory balance for July is $25,000. Perez 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 $28,000. Required a. Determine the amount of purchases budgeted for July. b. Determine the amount of cash payments budgeted for inventory purchases in July. Answer is complete but not entirely correct. a. Budgeted purchases b. Cash payments $ 349,800 $ 322,050

FINANCIAL ACCOUNTING
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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Perez Company, which sells electric razors, had $320,000 of cost of goods sold during the month of June. The company projects a 9 percent increase in cost of goods sold during July. The inventory balance as of June 30 is $24,000, and the desired ending inventory balance for July is $25,000. Perez 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 $28,000. Required a. Determine the amount of purchases budgeted for July. b. Determine the amount of cash payments budgeted for inventory purchases in July. Answer is complete but not entirely correct. a. Budgeted purchases b. Cash payments $ 349,800 $ 322,050
Transcribed Image Text:Perez Company, which sells electric razors, had $320,000 of cost of goods sold during the month of June. The company projects a 9 percent increase in cost of goods sold during July. The inventory balance as of June 30 is $24,000, and the desired ending inventory balance for July is $25,000. Perez 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 $28,000. Required a. Determine the amount of purchases budgeted for July. b. Determine the amount of cash payments budgeted for inventory purchases in July. Answer is complete but not entirely correct. a. Budgeted purchases b. Cash payments $ 349,800 $ 322,050
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