Cost of goods sold is expected to be 70% of sales. Hampton's policy is to maintain...
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Cost of goods sold is expected to be 70% of sales. Hampton's policy is to maintain an ending inventory equal to 25% of the next month's projected cost of goods sold. Supplier requires that hampton's pay for 60% of inventory purchases in the month of purchase and pay the remaining 40% the following month. Jan sales- 200,000 From hamton's sales budget Sales Month Budgeted Sales Hampton Hams Company 1 Section 1: Projected Purchases Budgeted Cost of Goods Sold Plus Desired End Inventory Invetory Needed Less Beginning Inventory Required Purchases (on Account) Section 2: Sechedule of Cash Payments for Inventory Purchase Payment of Current Months' Accts Pay Payment of Prior Month's Accts Pay Total Budgeted Disbursements for Inventory Oct 160,000 Oct Nov Dec 192,000 230,400 Purchases Budget Nov Dec Jan 200,000 Pro Forma Data Jan COGS 140,000 Capital expenditures budget calls for the cash purchases of $130,000 of store fixtures. The fixtures were purchased on Oct. 1, have a useful life of 10 years and a salvage value of $10,000 Sales commissions and utilities are paid the following month. (130,000-10,000)/10/12- depreciation per month From Hamton's sales budget: = Sales Total Budgeted Sales Rent Section 1: Projected S&A Expenses Salary Expense Sales Commissions 2% of Sales Supplies Expens 1% of Sales Utilities Depreciation on Store Equipment Hampton Hams Selling and Adminstrative (S&A) Expense Budget Miscellaneous Total S&A Expenses before Interest Oct Nov Dec 160,000 192,000 230,400 Miscellaneous expenses Total Payments for S&A Expenses Oct Section 2: Schedule of Cash Payments for S&A Expenses Salary Expense 100% of prior month's sales commissions Supplies Expenses, 1% of sales 100% of prior month's utility expenses Rent expenses Nov Dec 1000 Pro Forma Data Cost of goods sold is expected to be 70% of sales. Hampton's policy is to maintain an ending inventory equal to 25% of the next month's projected cost of goods sold. Supplier requires that hampton's pay for 60% of inventory purchases in the month of purchase and pay the remaining 40% the following month. Jan sales- 200,000 From hamton's sales budget Sales Month Budgeted Sales Hampton Hams Company 1 Section 1: Projected Purchases Budgeted Cost of Goods Sold Plus Desired End Inventory Invetory Needed Less Beginning Inventory Required Purchases (on Account) Section 2: Sechedule of Cash Payments for Inventory Purchase Payment of Current Months' Accts Pay Payment of Prior Month's Accts Pay Total Budgeted Disbursements for Inventory Oct 160,000 Oct Nov Dec 192,000 230,400 Purchases Budget Nov Dec Jan 200,000 Pro Forma Data Jan COGS 140,000 Capital expenditures budget calls for the cash purchases of $130,000 of store fixtures. The fixtures were purchased on Oct. 1, have a useful life of 10 years and a salvage value of $10,000 Sales commissions and utilities are paid the following month. (130,000-10,000)/10/12- depreciation per month From Hamton's sales budget: = Sales Total Budgeted Sales Rent Section 1: Projected S&A Expenses Salary Expense Sales Commissions 2% of Sales Supplies Expens 1% of Sales Utilities Depreciation on Store Equipment Hampton Hams Selling and Adminstrative (S&A) Expense Budget Miscellaneous Total S&A Expenses before Interest Oct Nov Dec 160,000 192,000 230,400 Miscellaneous expenses Total Payments for S&A Expenses Oct Section 2: Schedule of Cash Payments for S&A Expenses Salary Expense 100% of prior month's sales commissions Supplies Expenses, 1% of sales 100% of prior month's utility expenses Rent expenses Nov Dec 1000 Pro Forma Data
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To calculate the budgeted purchases and payments for inventory we need to follow the given informati... View the full answer
Related Book For
Accounting Principles
ISBN: 978-0470533475
9th Edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
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