Adams, Inc. sells fireworks. The company's marketing director developed the following cost of goods sold budget for April, May, June, and July. Budgeted cost of goods sold April May June $66,000 $76,000 $86,000 July $92, 000 Adams had a beginning inventory balance of $4,300 on April 1 and a beginning balance in accounts payable of $15,500. The company desires to maintain an ending inventory balance equal to 10 percent of the next period's cost of goods sold. Adams makes all purchases on account. The company pays 65 percent of accounts payable in the month of purchase and the remaining 35 percent in the month following purchase. Required a. Prepare an inventory purchases budget for April, May, and June. b. Determine the amount of ending inventory Adams will report on the end-of-quarter pro forma balance sheet. c. Prepare a schedule of cash payments for inventory for April, May, and June. d. Determine the balance in accounts payable Adams will report on the end-of-quarter pro forma balance sheet. Complete this question by entering your answers in the tabs below.
Adams, Inc. sells fireworks. The company's marketing director developed the following cost of goods sold budget for April, May, June, and July. Budgeted cost of goods sold April May June $66,000 $76,000 $86,000 July $92, 000 Adams had a beginning inventory balance of $4,300 on April 1 and a beginning balance in accounts payable of $15,500. The company desires to maintain an ending inventory balance equal to 10 percent of the next period's cost of goods sold. Adams makes all purchases on account. The company pays 65 percent of accounts payable in the month of purchase and the remaining 35 percent in the month following purchase. Required a. Prepare an inventory purchases budget for April, May, and June. b. Determine the amount of ending inventory Adams will report on the end-of-quarter pro forma balance sheet. c. Prepare a schedule of cash payments for inventory for April, May, and June. d. Determine the balance in accounts payable Adams will report on the end-of-quarter pro forma balance sheet. Complete this question by entering your answers in the tabs below.
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter9: Evaluating Variances From Standard Costs
Section: Chapter Questions
Problem 3E: Salisbury Bottle Company manufactures plastic two-liter bottles for the beverage industry. The cost...
Related questions
Concept explainers
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.
Question
Please answer complete question otherwise skip it
please answer within the format by providing formula the detailed working
Please provide answer in text (Without image)
Please provide answer in text (Without image)
Please provide answer in text (Without image)
Transcribed Image Text:Adams, Inc. sells fireworks. The company's marketing director developed the following cost of goods sold budget for April, May, June,
and July.
Budgeted cost of goods sold
April
$66, 000
May
$76,000
June
$86,000
July
$92,000
Adams had a beginning inventory balance of $4,300 on April 1 and a beginning balance in accounts payable of $15,500. The company
desires to maintain an ending inventory balance equal to 10 percent of the next period's cost of goods sold. Adams makes all
purchases on account. The company pays 65 percent of accounts payable in the month of purchase and the remaining 35 percent in
the month following purchase.
Required
a. Prepare an inventory purchases budget for April, May, and June.
b. Determine the amount of ending inventory Adams will report on the end-of-quarter pro forma balance sheet.
c. Prepare a schedule of cash payments for inventory for April, May, and June.
d. Determine the balance in accounts payable Adams will report on the end-of-quarter pro forma balance sheet.
Complete this question by entering your answers in the tabs below.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Excel Applications for Accounting Principles
Accounting
ISBN:
9781111581565
Author:
Gaylord N. Smith
Publisher:
Cengage Learning
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Excel Applications for Accounting Principles
Accounting
ISBN:
9781111581565
Author:
Gaylord N. Smith
Publisher:
Cengage Learning
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
Financial And Managerial Accounting
Accounting
ISBN:
9781337902663
Author:
WARREN, Carl S.
Publisher:
Cengage Learning,
Survey of Accounting (Accounting I)
Accounting
ISBN:
9781305961883
Author:
Carl Warren
Publisher:
Cengage Learning