Determine the balance in accounts payable spratt will

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Reference no: EM13589856

Spratt, Inc., sells fireworks. The company's marketing director developed the following cost of goods sold budget for April, May, June, and July.

April

May

June

July

Budgeted cost of goods sold

$64,000

$74,000

$84,000

$90,000

Plus desired Inventory

Inventory Needed

Less Beginning Inventory

Required Purchases

Spratt had a beginning inventory balance of $4,500 on April 1 and a beginning balance in accounts payable of $14,500. The company desires to maintain an ending inventory balance equal to 15 percent of the next period's cost of goods sold. Spratt makes all purchases on account. The company pays 60 percent of accounts payable in the month of purchase and the remaining 40 percent in the month following purchase.

Required:

a.	Prepare an inventory purchases budget for April, May, and June. (Input all amounts as positive values. Do not round intermediate calculations. Round your answers to the nearest dollar amount. Omit the "$" sign in your response.)

Inventory Purchases Budget	April	May	June
(Click to select)Less beginning inventoryPlus desired ending inventoryPlus beginning inventoryLess desired ending inventoryBudgeted cost of goods sold	$	$	$
(Click to select)Less desired ending inventoryPlus desired ending inventoryLess beginning inventoryBudgeted cost of goods soldPlus beginning inventory

Inventory needed
(Click to select)Plus beginning inventoryLess beginning inventoryLess desired ending inventoryBudgeted cost of goods soldPlus desired ending inventory

Required purchases (on account)	$	$	$

b.	Determine the amount of ending inventory Spratt will report on the end-of-quarter pro forma balance sheet. (Do not round intermediate calculations. Round your answer to the nearest dollar amount. Omit the "$" sign in your response.)

Ending inventory

c.	Prepare a schedule of cash payments for inventory for April, May, and June. (Round your intermediate calculations and final answers to the nearest dollar amount. Omit the "$" sign in your response.)

Schedule of Cash Payments	April	May	June
Payment of current accounts payable	$	$	$
Payment of previous accounts payable

Total budgeted payments for inventory	$	$	$

d.	Determine the balance in accounts payable Spratt will report on the end-of-quarter pro forma balance sheet. (Round your intermediate calculations and final answers to the nearest dollar amount.Omit the "$" sign in your response.)

Accounts payable

Reference no: EM13589856

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