A B F G H 1 J K D 1 Problem 5: Purchase budget and Cash payment schedule 2 3 Woodwards 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 $500,000 $550.000 $600,000 8 9. The following relevant information are also provided: 10 11 Budgeted monthly cost of goods sold equals 50% of budgeted monthly sales. 12 Each month's desired ending inventory should be $5,000 plus 15% of the current month's COGS 13 The ending inventory balance at March 31 20YY was $40,000 14 All purchases are made on account. WALALALALA 15 The company's suppliers require that 20% of accounts payable are paid during the month of purchase, 16 with the remaining 80% paid in the month after purchase. BATENE ER 17 The outstanding accounts payable at March 31, 20YY was $60,000 which is to be paid in April. 18 19 Required: 20 Use the Table below to prepare 21 a Purchase Budget and Cash Payment Schedule for the second quarter of 20YY 22 23 Solution: 24 25 Inventory purchases budget for Second quarter 20YY 26 April May June Proforma statement data 27 Purchase Budget $ $ $ $ 28 Budgeted cost of goods sold: 29 Desired ending inventory 30 Total inventory needed 31 Less beginning inventory 32 Required inventory purchases 33 $ $ 34 Schedule of cash payments for: 35 Current month's inventory purchases 36 Previous month's inventory purchases 37 Total cash payments for inventory 38 39 40 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 2014 Siddique, Salina: Desired Ending inventory to be reported in the Budgeted Balance Sheet as at Jume 30, 20YY Siddique, Salina: Expected Accounts Payable to be reported in the Budgeted Balance Sheet as at June 30, 2017 41 42 43 44