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Campbell, Inc. sells fireworks. The company’s marketing director developed the following cost of goods sold budget...

Campbell, 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 $61,000 $71,000 $81,000 $87,000

Campbell had a beginning inventory balance of $3,400 on April 1 and a beginning balance in accounts payable of $15,700. The company desires to maintain an ending inventory balance equal to 15 percent of the next period’s cost of goods sold. Campbell 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

  1. Prepare an inventory purchases budget for April, May, and June.

  2. Determine the amount of ending inventory Campbell will report on the end-of-quarter pro forma balance sheet.

  3. Prepare a schedule of cash payments for inventory for April, May, and June.

  4. Determine the balance in accounts payable Campbell will report on the end-of-quarter pro forma balance sheet.

Prepare an inventory purchases budget for April, May, and June.

Inventory Purchases Budget April May June
Budgeted cost of goods sold $61,000   $71,000   $81,000
Inventory needed 61,000 71,000 81,000
Required purchases (on account) $61,000 $71,000 $81,000

Determine the amount of ending inventory Campbell will report on the end-of-quarter pro forma balance sheet.

Ending inventory :

Prepare a schedule of cash payments for inventory for April, May, and June. (Round your final answers to the nearest whole dollar.)

Schedule of Cash Payments April   May    June  
Payment of current accounts payable
Payment of previous accounts payable
Total budgeted payments for inventory $0 $0 $0

Determine the balance in accounts payable Campbell will report on the end-of-quarter pro forma balance sheet.

Accounts payable :   

Solutions

Expert Solution

Prepare an inventory purchases budget for April, May, and June.

Inventory Purchases Budget April May June
Budgeted cost of goods sold $61,000   $71,000   $81,000
Desired ending inventory 10650 12150 13050
Inventory needed 71650 83150 94050
Less: Beginning inventory -3400 -10650 -12150
Required purchases (on account) 68250 72500 81900

Determine the amount of ending inventory Campbell will report on the end-of-quarter pro forma balance sheet.

Ending inventory : $13050

Prepare a schedule of cash payments for inventory for April, May, and June. (Round your final answers to the nearest whole dollar.)

Schedule of Cash Payments April   May    June  
Payment of current accounts payable 44363 47125 53235
Payment of previous accounts payable 15700 23887 25375
Total budgeted payments for inventory 60063 71012 78610

Determine the balance in accounts payable Campbell will report on the end-of-quarter pro forma balance sheet.

Accounts payable :    $28665

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ekkarill92 answered 2 years ago
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