Staff Inc. sells tire rims. Its sales budget for the nine months ended September 30, 2018, and additional information follow: Quarter Ended Nine-Month March 31 June 30 September 30 Total Cash sales, 30% $37,500 $52,500 $45,000 $135,000 Credit sales, 70% 87,500 122,500 105,000 315,000 Total sales $125,000 $175,000 $150,000 $450,000 In the past, cost of goods sold has been 40% of total sales. The director of marketing and the financial vice president agree that each quarter's ending inventory should not be below $9,000 plus 10% of cost of goods sold for the following quarter. The marketing director expects sales of $225,000 during the fourth quarter. The January 1 inventory was $36,000. Prepare an inventory, purchases, and cost of goods sold budget for each of the first three quarters of the year.
Staff Inc. sells tire rims. Its sales budget for the nine months ended September 30, 2018, and additional information follow: Quarter Ended Nine-Month March 31 June 30 September 30 Total Cash sales, 30% $37,500 $52,500 $45,000 $135,000 Credit sales, 70% 87,500 122,500 105,000 315,000 Total sales $125,000 $175,000 $150,000 $450,000 In the past, cost of goods sold has been 40% of total sales. The director of marketing and the financial vice president agree that each quarter's ending inventory should not be below $9,000 plus 10% of cost of goods sold for the following quarter. The marketing director expects sales of $225,000 during the fourth quarter. The January 1 inventory was $36,000. Prepare an inventory, purchases, and cost of goods sold budget for each of the first three quarters of the year.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Staff Inc. sells tire rims. Its sales budget for the nine months ended September 30, 2018, and additional information follow:
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Quarter Ended
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Nine-Month
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||
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March 31
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June 30
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September 30
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Total
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Cash sales, 30%
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$37,500
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$52,500
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$45,000
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$135,000
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Credit sales, 70%
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87,500
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122,500
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105,000
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315,000
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Total sales
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$125,000
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$175,000
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$150,000
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$450,000
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In the past, cost of goods sold has been 40% of total sales. The director of marketing and the financial vice president agree that each quarter's ending inventory should not be below $9,000 plus 10% of cost of goods sold for the following quarter. The marketing director expects sales of $225,000 during the fourth quarter. The January 1 inventory was $36,000.
Prepare an inventory, purchases, and cost of goods sold budget for each of the first three quarters of the year.
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