Widden Company, which sells electric razors, had $360,000 of cost of goods sold during the month of June. The company projects a 7 percent increase in cost of goods sold during July. The inventory balance as of June 30 is $25,000, and the desired ending inventory balance for July is $26,000. Widden pays cash to settle 70 percent of its purchases on account during the month of purchase and pays the remaining 30 percent in the month following the purchase. The accounts payable balance as of June 30 was $35,000. Required a. Determine the amount of purchases budgeted for July. Budgeted purchases b. Determine the amount of cash payments budgeted for inventory purchases in July. Cash payments

Widden Company, which sells electric razors, had $360,000 of cost of goods sold during the month of June. The company projects a 7 percent increase in cost of goods sold during July. The inventory balance as of June 30 is $25,000, and the desired ending inventory balance for July is $26,000. Widden pays cash to settle 70 percent of its purchases on account during the month of purchase and pays the remaining 30 percent in the month following the purchase. The accounts payable balance as of June 30 was $35,000. Required a. Determine the amount of purchases budgeted for July. Budgeted purchases b. Determine the amount of cash payments budgeted for inventory purchases in July. Cash payments

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter3: Evaluation Of Financial Performance

Section: Chapter Questions

Problem 14P

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