Zachary Company, which sells electric razors, had $380,000 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. Zachary 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 $35,000. Required a. Determine the amount of purchases budgeted for July. b. Determine the amount of cash payments budgeted for inventory purchases in July. a. Budgeted purchases b. Cash payments
Zachary Company, which sells electric razors, had $380,000 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. Zachary 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 $35,000. Required a. Determine the amount of purchases budgeted for July. b. Determine the amount of cash payments budgeted for inventory purchases in July. a. Budgeted purchases b. Cash payments
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Zachary Company, which sells electric razors, had $380,000 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. Zachary 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 $35,000.
Required
a. Determine the amount of purchases budgeted for July.
b. Determine the amount of cash payments budgeted for inventory purchases in July.
a. Budgeted purchases
b. Cash payments
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