Secure htp odule 14 Homework 2 Franikin, Inc. sells freworks. The company\'s mar

Question

Secure htp odule 14 Homework 2 Franikin, Inc. sells freworks. The company's marketing director developed the following cost of goods sold budget for Aprl, May, June and July Budgeted cost of goods sold 71,00$81,00 $91,000 $97,900 Franklin had a beginning inventory balance of $4.200 on April 1 and a beginning balance in accounts payable of S15.200 The company desires to maintain an ending inventory balance equal to 15 percent of the next peniods cost of goods sold Frankin 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 Apri, May and June b. Desermine the amount of ending inventory Frankin will report on the end-of-quarter pro forma balance sheet c. Prepare a schedule of cash payments for inventory for Apni, May, and June d. Determine the balance in accounts payable Franikin will report on the end-of -quarter pro forma balance sheet Complete this question by entering your answers in the tabs below Required & Required 8 Required C Rquired D Prepare an inventory purchases budget for April, May, and June. Required purchases on accout enovO

Explanation / Answer

a Inventory purchase budget

15%*81000

=12150

15%*91000

=13650

15%*97000

=14550

b. Ending inventory Balance in Balance sheet on end of quarter = [15%* $97000(cost of goods sold of July Month)]

=$14550

c.

d. Balance in Accounts payable in Balance sheet on end of quarter = $91900*0.35

=$32165

April may June Budgeted cost of goods sold 71000 81000 91000 Add: Ending inventory

15%*81000

=12150

15%*91000

=13650

15%*97000

=14550

$83150 $94650 $105550 less: Beginning inventory 4200 12150 13650 Required Purchase (On account) $78950 $82500 $91900

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