Homework: Chapter 9 The Master Budget Save Score: 0 of 1 pt 5 of 7 (4 complete)

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Homework: Chapter 9 The Master Budget Save Score: 0 of 1 pt 5 of 7 (4 complete) ? HW Score: 40%, 4 of 10 pts E9-34A (similar to) Question Help Skaff Readers sells eReaders. Its sales budget for the nine months ended September 30 follows: ?(Click the icon to view the budget.) In the past cost o goods sold has been 75% of total sales. The director of marketing and the financial vice president agree that each quarter's ending inventory should not be below $5,000 plus 20% of cost of goods sold for the following quarter. The marketing director expects sales of $220,000 during the fourth quarter. The January 1 inventory was $20,000 Requirement Prepare a cost of goods sold, inventory, and purchases budget for each of the first three quarters of the year. Compute cost of goods sold for the entire nine-month period. Round amounts to the nearest whole dollar.) Data Table Skaff Readers Cost of Goods Sold, Inventory, and Purchases Budget For the Nine Months Ended September 30 Quarter Ended Nine-Month Quarter Ended Nine-month Mar 31 Jun 30 Sep 30 Total 25,000 $ 100,000 125,000 75,000 300,000 375,000 $ 20,000 $30,000 $ Cash sales, 20% Credits sales, 8096 Total sales, 100% Mar 31 Jun 30 Sep 30 Total 80,000 120,000 Cost of goods sold Plus: Desired ending inventory Total inventory required Less: Beginning inventory $ 100,000 $150,000 $ PrintDone

Explanation / Answer

Cost of goods sold, inventory and purchase budget :

Mar 31 June 30 Sep 30 Nine month total Cost of goods sold 75000 112500 93750 281250 Plus : Desired ending inventory 27500 23750 38000 38000 Total inventory required 102500 136250 131750 319250 Less: Beginning inventory -20000 -27500 -23750 -20000 Purchases 82500 108750 108000 299250

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