Perez Company, which sells electric razors, had $320,000 of cost of goods sold during the month of June. The company projects a 6 percent increase in cost of goods sold during July. The inventory balance as of June 30 is $27,000, and the desired ending inventory balance for July is $28,000. Perez pays cash to settle 75 percent of its purchases on account during the month of purchase and pays the remaining 25 percent in the month following the purchase. The accounts payable balance as of June 30 was $38,000. Required a. Determine the amount of purchases budgeted for July. b. Determine the amount of cash payments budgeted for inventory purchases in July. a. Budgeted purchases b. Cash payments

Perez Company, which sells electric razors, had $320,000 of cost of goods sold during the month of June. The company projects a 6 percent increase in cost of goods sold during July. The inventory balance as of June 30 is $27,000, and the desired ending inventory balance for July is $28,000. Perez pays cash to settle 75 percent of its purchases on account during the month of purchase and pays the remaining 25 percent in the month following the purchase. The accounts payable balance as of June 30 was $38,000. Required a. Determine the amount of purchases budgeted for July. b. Determine the amount of cash payments budgeted for inventory purchases in July. a. Budgeted purchases b. Cash payments

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter3: Evaluation Of Financial Performance

Section: Chapter Questions

Problem 14P

See similar textbooks

Similar questions

Langstons purchased $3,100 of merchandise during the month, and its monthly income statement shows a cost of goods sold of $3,000. What was the beginning inventory if the ending inventory was $1,250?
Earthies Shoes has 55% of its sales in cash and the remainder on credit. Of the credit sales, 70% is collected in the month of sale, 15% is collected the month after the sale, and 10% is collected the second month after the sale. How much cash will be collected in June if sales are estimated as $75,000 in April, $65,000 in May, and $90,000 in June?
Fitbands estimated sales are: What are the balances in accounts receivable for January, February, and March if 65% of sales is collected in the month of sale, 25% is collected the month after the sale, and 10% is second month after the sale?
Cash collections for Renew Lights found that 65% of sales were collected in the month of sale, 25% was collected the month after the sale, and 10% was collected the second month after the sale. Given the sales shown, how much cash will be collected in March and April?
Ranger Industries has provided the following information at June 30: Other information: Average selling price, 196 Average purchase price per unit, 110 Desired ending inventory, 40% of next months unit sales Collections from customers: In month of sale20% In month after sale50% Two months after sale30% Projected cash payments: Inventory purchases are paid for in the month following acquisition. Variable cash expenses, other than inventory, are equal to 25% of each months sales and are paid in the month of sale. Fixed cash expenses are 40,000 per month and are paid in the month incurred. Depreciation on equipment is 2,000 per month. REQUIREMENT You have been asked to prepare a master budget for the upcoming quarter (July, August, and September). The components of this budget are a monthly sales budget, a monthly purchases budget, a monthly cash budget, a forecasted income statement for the quarter, and a forecasted September 30 balance sheet. The worksheet MASTER has been provided to assist you. Ranger Industries desires to maintain a minimum cash balance of 8,000 at the end of each month. If this goal cannot be met, the company borrows the exact amount needed to reach its goal. If the company has a cash balance greater than 8,000 and also has loans payable outstanding, the amount in excess of 8,000 is paid to the bank. Annual interest of 18% is paid on a monthly basis on the outstanding balance.
Nonnas Re-Appliance Store collects 55% of its accounts receivable in the month of sale and 40% in the month after the sale. Given the following sales, how much cash will be collected in February?
Cash collections for Wax On Candles found that 60% of sales were collected in the month of the sale, 30% was collected the month after the sale, and 10% was collected the second month after the sale. Given the sales shown, how much cash will be collected in January and February?
Amusement tickets estimated sales are: What are the balances in accounts receivable for April, May, and June if 60% of sales are collected in the month of sale, 30% are collected the month after the sale, and 10% are collected the second month after the sale?
On September 30, 2013, the general ledger of Leons Golf Shop, which uses the calendar year as its accounting period, showed the following year-to-date account balances: The merchandise inventory account had a 48,000 balance on January 1, 2013. The historical gross profit percentage is 40%. Leon prepares quarterly financial statements and takes physical inventory once a yearat the end of the accounting period. In order to prepare the financial statements for the third quarter, the store needs to have an estimate of ending inventory. You have been asked to use the gross profit method to estimate the ending inventory. Review the worksheet called GP. Study it carefully because it may have a solution format somewhat different from the one shown in your textbook.
Widden Company, which sells electric razors, had $360,000 of cost of goods sold during the month of June. The company projects a 7 percent increase in cost of goods sold during July. The inventory balance as of June 30 is $25,000, and the desired ending inventory balance for July is $26,000. Widden pays cash to settle 70 percent of its purchases on account during the month of purchase and pays the remaining 30 percent in the month following the purchase. The accounts payable balance as of June 30 was $35,000. Required a. Determine the amount of purchases budgeted for July. Budgeted purchases b. Determine the amount of cash payments budgeted for inventory purchases in July. Cash payments
Benson Company, which sells electric razors, had $300,000 of cost of goods sold during the month of June. The company projects a 6 percent increase in cost of goods sold during July. The inventory balance as of June 30 is $19,000, and the desired ending inventory balance for July is $20,000. Benson pays cash to settle 75 percent of its purchases on account during the month of purchase and pays the remaining 25 percent in the month following the purchase. The accounts payable balance as of June 30 was $34,000. Required a. Determine the amount of purchases budgeted for July. b. Determine the amount of cash payments budgeted for inventory purchases in July. a. Budgeted purchases b. Cash payments
Baird Company, which sells electric razors, had $330,000 of cost of goods sold during the month of June. The company projects a 8 percent increase in cost of goods sold during July. The inventory balance as of June 30 is $31,000, and the desired ending inventory balance for July is $32,000. Baird pays cash to settle 75 percent of its purchases on account during the month of purchase and pays the remaining 25 percent in the month following the purchase. The accounts payable balance as of June 30 was $44,000. Determine the amount of purchases budgeted for July. Determine the amount of cash payments budgeted for inventory purchases in July.