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Big Sound, a merchandising company specializing in home computer speakers, budgets its monthly cost of goods sold to equal 70% of sales. Its Inventory policy calls for ending Inventory at the end of each month to equal 20% of the next month's budgeted cost of goods sold. All purchases are on credit, and 25% of the purchases in a month is paid for in the same month. Another 60% is paid for during the first month after purchase, and the remaining 15% is paid for in the second month after purchase. The following sales budgets are set: July, $350,000; August, $290,000; September, $320,000; October, $275,000; and November, $265,000. (Hint For part 1, refer to Exhibits 22A.2 and 22A.3 for guidance, but note that budgeted sales are in dollars for this assignment.) Answer is not complete. (1) Compute the budgeted merchandise purchases for July, August, September, and October. July August September Budgeted ending inventory Cost of goods sold (estimated) Required available inventory Budgeted beginning inventory Required purchases July purchases August purchases September purchases October purchases July purchases August purchases September purchases September 30 budgeted accounts payable 350,000 $ 245,000 595,000 49,000 $ 546,000 $ October $ (2) Compute the budgeted payments on accounts payable for September and October. July purchases August purchases September purchases October purchases October 31 hudgeted accounts payable Purchases $ 546,000 452,400 499,200 429,000 Purchases $ (3) Compute the budgeted ending balances of accounts payable for September and October. September Amount unpaid as of September 30 546,000 452,400 499,200 290,000 $ 203,000 493,000 Purchases 40,600 452,400 $ 546,000 452,400 499,200 429,000 August $ % unpaid as of September 30 % unpaid as of October 31 320,000 $ 224,000 544,000 44,800 499,200 Purchases paid in September Amount unpaid as of October 31 $ October 275,000 192,500 467,500 38,500 429,000 October November After October

Big Sound, a merchandising company specializing in home computer speakers, budgets its monthly cost of goods sold to equal 70% of sales. Its Inventory policy calls for ending Inventory at the end of each month to equal 20% of the next month's budgeted cost of goods sold. All purchases are on credit, and 25% of the purchases in a month is paid for in the same month. Another 60% is paid for during the first month after purchase, and the remaining 15% is paid for in the second month after purchase. The following sales budgets are set: July, $350,000; August, $290,000; September, $320,000; October, $275,000; and November, $265,000. (Hint For part 1, refer to Exhibits 22A.2 and 22A.3 for guidance, but note that budgeted sales are in dollars for this assignment.) Answer is not complete. (1) Compute the budgeted merchandise purchases for July, August, September, and October. July August September Budgeted ending inventory Cost of goods sold (estimated) Required available inventory Budgeted beginning inventory Required purchases July purchases August purchases September purchases October purchases July purchases August purchases September purchases September 30 budgeted accounts payable 350,000 $ 245,000 595,000 49,000 $ 546,000 $ October $ (2) Compute the budgeted payments on accounts payable for September and October. July purchases August purchases September purchases October purchases October 31 hudgeted accounts payable Purchases $ 546,000 452,400 499,200 429,000 Purchases $ (3) Compute the budgeted ending balances of accounts payable for September and October. September Amount unpaid as of September 30 546,000 452,400 499,200 290,000 $ 203,000 493,000 Purchases 40,600 452,400 $ 546,000 452,400 499,200 429,000 August $ % unpaid as of September 30 % unpaid as of October 31 320,000 $ 224,000 544,000 44,800 499,200 Purchases paid in September Amount unpaid as of October 31 $ October 275,000 192,500 467,500 38,500 429,000 October November After October

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter8: Budgeting For Planning And Control
Section: Chapter Questions
Problem 15E: Palmgren Company produces consumer products. The sales budget for four months of the year is...
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Big Sound, a merchandising company specializing in home computer speakers, budgets its monthly cost of goods sold to equal 70% of sales. Its Inventory policy calls for ending Inventory at the end of each month to equal 20% of the next month's budgeted cost of goods sold. All purchases are on credit, and 25% of the purchases in a month is paid for in the same month. Another 60% is paid for during the first month after purchase, and the remaining 15% is paid for in the second month after purchase. The following sales budgets are set: July, $350,000; August, $290,000; September, $320,000; October, $275,000; and November, $265,000. (Hint For part 1, refer to Exhibits 22A.2 and 22A.3 for guidance, but note that budgeted sales are in dollars for this assignment.) Answer is not complete. (1) Compute the budgeted merchandise purchases for July, August, September, and October. July August 350,000 $ 245,000 595,000 49,000 $ 546,000 $ Budgeted ending inventory Cost of goods sold (estimated) Required available inventory Budgeted beginning inventory Required purchases July purchases August purchases September purchases October purchases (2) Compute the budgeted payments on accounts payable for September and October. September July purchases August purchases September purchases September 30 budgeted accounts payable October $ July purchases August purchases September purchases October purchases October 31 budgeted accounts payable Purchases 546,000 452,400 499,200 429,000 $ Purchases (3) Compute the budgeted ending balances of accounts payable for September and October. % unpaid as of September 30 $ 546,000 452,400 499,200 Purchases $ 290,000 203,000 493,000 40,600 452,400 546,000 452,400 499,200 429,000 August $ % unpaid as of October 31 September 320,000 224,000 544,000 44,800 499,200 Purchases paid in September Amount unpaid as of September 30 Amount unpaid as of October 31 $ October 275,000 X 192,500 467,500 38,500 429,000 October November After October
Transcribed Image Text:Big Sound, a merchandising company specializing in home computer speakers, budgets its monthly cost of goods sold to equal 70% of sales. Its Inventory policy calls for ending Inventory at the end of each month to equal 20% of the next month's budgeted cost of goods sold. All purchases are on credit, and 25% of the purchases in a month is paid for in the same month. Another 60% is paid for during the first month after purchase, and the remaining 15% is paid for in the second month after purchase. The following sales budgets are set: July, $350,000; August, $290,000; September, $320,000; October, $275,000; and November, $265,000. (Hint For part 1, refer to Exhibits 22A.2 and 22A.3 for guidance, but note that budgeted sales are in dollars for this assignment.) Answer is not complete. (1) Compute the budgeted merchandise purchases for July, August, September, and October. July August 350,000 $ 245,000 595,000 49,000 $ 546,000 $ Budgeted ending inventory Cost of goods sold (estimated) Required available inventory Budgeted beginning inventory Required purchases July purchases August purchases September purchases October purchases (2) Compute the budgeted payments on accounts payable for September and October. September July purchases August purchases September purchases September 30 budgeted accounts payable October $ July purchases August purchases September purchases October purchases October 31 budgeted accounts payable Purchases 546,000 452,400 499,200 429,000 $ Purchases (3) Compute the budgeted ending balances of accounts payable for September and October. % unpaid as of September 30 $ 546,000 452,400 499,200 Purchases $ 290,000 203,000 493,000 40,600 452,400 546,000 452,400 499,200 429,000 August $ % unpaid as of October 31 September 320,000 224,000 544,000 44,800 499,200 Purchases paid in September Amount unpaid as of September 30 Amount unpaid as of October 31 $ October 275,000 X 192,500 467,500 38,500 429,000 October November After October
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