Thornton Books buys books and magazines directly from publishers and distributes them to grocery stores. The wholesaler expects to purchase the following inventory: April May June Required purchases (on account) $ 113,000 $ 133,000 $ 145,000 Thornton Books’s accountant prepared the following schedule of cash payments for inventory purchases. Thornton Books’s suppliers require that 90 percent of purchases on account be paid in the month of purchase; the remaining 10 percent are paid in the month following the month of purchase. Required Complete the schedule of cash payments for inventory purchases by filling in the missing amounts. Determine the amount of accounts payable the company will report on its pro forma balance sheet at the end of the second quarter.
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.
Thornton Books buys books and magazines directly from publishers and distributes them to grocery stores. The wholesaler expects to purchase the following inventory:
| April | May | June | |||||||
| Required purchases (on account) | $ | 113,000 | $ | 133,000 | $ | 145,000 | |||
Thornton Books’s accountant prepared the following schedule of cash payments for inventory purchases. Thornton Books’s suppliers require that 90 percent of purchases on account be paid in the month of purchase; the remaining 10 percent are paid in the month following the month of purchase.
Required
-
Complete the schedule of cash payments for inventory purchases by filling in the missing amounts.
-
Determine the amount of accounts payable the company will report on its pro forma
balance sheet at the end of the second quarter.
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