A B D E F G H 1 K L M M N 1 Problem 3: Preparation of Purchase budget and Cash payment schedule 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 8 9 The following relevant information are also provided: 10 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 Tel 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 Inventory purchases budget for the second quarter 20YY 27 27 April May June Proforma statement data 28 Purchase Budget $ $ 29 Budgeted cost of goods sold 30 Desired ending inventory 31 Total inventory needed 32 Less beginning inventory 33 Required inventory purchases 34 Schedule of cash payments for the second quarter 20YY 35 Cash payments for: $ $ 36 Current month's inventory purchases 37 Previous month's inventory purchases 38 Total cash payments for inventory 39 Siddique, Salina: Relevant budgeted data to be reported in the Budgeted Income Statement and Budgeted Balance Sheet $ $ Siddique, Salina: Total Budgeted COGS to be reported in the Budgeted Income Statement of the Second Quarter of 20YY. Siddique, Salina: Desired Ending inventory to be reported in the Budgeted Balance Sheet as at dume 30, 20YY. $ Siddique, Salina: Expected Accounts Payable to be reported in the Budgeted Balance Sheet as at June 30, 20YY
