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2 3 Walton Inc. is preparing its inventory purchase budget for the second quarter of 20YY, 4 and provided the following sales budget for the
2 3 Walton Inc. is preparing its inventory purchase budget for the second quarter of 20YY, 4 and provided the following sales budget for the second quarter of 20YY. 5 6 April May June 7 Projected sales $300,000 $400,000 $500,000 9 The following relevant information are also provided: 10 E 11 Budgeted monthly cost of goods sold equals 40% of budgeted monthly sales. 12 Each month's desired ending inventory should be $10,000 plus 10% of the current month's COGS 13 The ending inventory balance at March 31 20YY was $18,000 14 All purchases are made on account. 15 The company's suppliers require Walton to pay 30% of its accounts payable during the month of purchase, 16 with the remaining 70% in the month after purchase. 17 The outstanding accounts payable at March 31, 20YY was $56,800 which is to be paid in April. 18 19 Required: 20 Use the Table below to prepare: 21 Inventory Purchase Budget and Cash Payment Schedule for the second quarter of 20YY. 22 Value must be entered in the green cells of the table below. 23 24 Solution: 25 26 27 28 Purchase Budget Inventory purchases budget for the second quarter 20YY April May June Proforma statement data $ $ $ $ 29 Budgeted cost of goods sold 30 Desired ending inventory 31 Total inventory needed 32 Less beginning inventory 33 Required inventory purchases 34 35 Cash payments for: Schedule of cash payments for the second quarter 20YY 36 Current month's inventory purchases 37 Previous month's inventory purchases 38 Total cash payments for inventory $ $ $ 39 40 41 42
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