**Sentra Sporting Company Inventory Budget Analysis**Sentra Sporting Company specializes in tennis rackets and other sporting equipment. The purchasing department manager has formulated the inventory purchases budget. As per Sentra's policy, the ending inventory balance must equal 15% of the following month's cost of goods sold. It is given that January's budgeted cost of goods sold is $160,000.Below is the detailed table representing the budgeted costs and inventories for October through December:| Description | October | November | December ||------------------------------------------|---------|----------|----------|| Budgeted Cost of Goods Sold | 150,000 | 130,000 | 140,000 || Plus: Desired Ending Inventory | 42,000 | ? | ? || Inventory Needed | 192,000 | ? | ? || Less: Beginning Inventory | 27,000 | ? | ? || Required Purchases (on Account) | 165,000 | ? | ? |- **Desired Ending Inventory** for each month is calculated as 15% of the next month’s Budgeted Cost of Goods Sold.- **Inventory Needed** is the sum of the Budgeted Cost of Goods Sold and the Desired Ending Inventory for that month.- **Required Purchases (on Account)** is calculated by subtracting the Beginning Inventory from the Inventory Needed.**Question:**What would be the required purchases (on account) for December?**Answer Choice:**- $119,000[Graphical Representation Not Applicable]

Purchase budget: Purchase budget is prepared at the starting of the year to know the purchase…

Sentra Sporting Company sells tennis rackets and other sporting equipment. The purchasing department manager prepared the inventory purchases budget. Sentra's policy is to maintain an ending inventory balance equal to 15% of the following month's cost of goods sold. January's budgeted cost of goods sold is $160,000. Budgeted Cost of Goods Sold Plus: Desired Ending Inventory Inventory Needed Less: Beginning Inventory 27,000 Required purchases (on Account) 165,000 October November December 150,000 130,000 140,000 42,000 192,000 Multiple Choice What would be the required purchases (on account) for December? $119,000 ? ? ? ? ? ? ? ?

Sentra Sporting Company sells tennis rackets and other sporting equipment. The purchasing department manager prepared the inventory purchases budget. Sentra's policy is to maintain an ending inventory balance equal to 15% of the following month's cost of goods sold. January's budgeted cost of goods sold is $160,000. Budgeted Cost of Goods Sold Plus: Desired Ending Inventory Inventory Needed Less: Beginning Inventory 27,000 Required purchases (on Account) 165,000 October November December 150,000 130,000 140,000 42,000 192,000 Multiple Choice What would be the required purchases (on account) for December? $119,000 ? ? ? ? ? ? ? ?

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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Summit Company has budgeted purchases of merchandise inventory of $457,500 in January and $533,750 in February. Assume Summit pays for inventory purchases 40% in the month of the purchase and 60% in the month after purchase. The Accounts Payable balance on December 31 is $97,350. Prepare a schedule of cash payments for purchases for January and February. Cash Payments January February 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
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Tuscarora, Inc., a merchandising company, has the following budgeted figures: Sales Cost of goods sold Required ending inventory Jan $56,700 60% of sales Feb $64,000 Mar April $88,000 $92,000 $10,000 + 30% of next month's sales $27,500 Inventory on hand on Jan 1 Calculate the budgeted purchases for the month of January. OA. $4,820 OB. $63,220 OC. $35,720 OD. $29,200
subject - accounting
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Metro, Incorporated sells backpacks. The Company's accountant is preparing the purchases budget for the first quarter operations. Metro maintains ending inventory at 15% of the following month's expected cost of goods sold. Expected cost of goods sold for April is $78,000. All purchases are made on account with 30% of accounts paid in the month of purchase and the remaining 70% paid in the month following the month of purchase. Sales January $ 44,000 February $ 58,000 Budgeted cost of goods sold Plus: Desired ending inventory Inventory needed Less: Beginning inventory March $ 64,000 8,700 52,700 (6,600) Required purchases $ 43,900 Based on this information the amount of accounts payable appearing on the March 31 pro forma balance sheet is Multiple Choice $19,830. $46,270. $66,100. None of the answers is correct.
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