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Eco Home, which sells eco-friendly home products, had the following details for March and April: Item March () April () Cost of Goods Sold 270,000

Eco Home, which sells eco-friendly home products, had the following details for March and April:

Item

March (£)

April (£)

Cost of Goods Sold

270,000


Projected Increase (%)

7%


Inventory Balance (End)

25,000

27,000

Accounts Payable Balance

35,000


Cash Payments (Current Month)

80%


Cash Payments (Following Month)

20%


Requirements:

  1. Determine the amount of purchases budgeted for April.
  2. Calculate the total cash payments for inventory purchases in April and prepare a cash budget.
  3. Prepare the tax calculation for the company if the profit before tax is £100,000 and the tax rate is 25%.

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