Finch, Inc. sells fireworks. The companys marketing director developed the following cost of goods sold budget for April, May, June, and July.

	April	May	June	July
Budgeted cost of goods sold	$66,000	$76,000	$86,000	$92,000

Finch had a beginning inventory balance of $3,500 on April 1 and a beginning balance in accounts payable of $15,200. The company desires to maintain an ending inventory balance equal to 20 percent of the next periods cost of goods sold. Finch makes all purchases on account. The company pays 60 percent of accounts payable in the month of purchase and the remaining 40 percent in the month following purchase.

Required

1. Prepare an inventory purchases budget for April, May, and June.

2. Determine the amount of ending inventory Finch will report on the end-of-quarter pro forma balance sheet.

3. Prepare a schedule of cash payments for inventory for April, May, and June.

4. Determine the balance in accounts payable Finch will report on the end-of-quarter pro forma balance sheet.

Inventory Purchases Budget Budgeted cost of goods sold April $ 66,000 $ May June 76,000 $ 86,000 Inventory needed Required purchases (on account) Ending inventory April May June Schedule of Cash Payments Payment of current accounts payable Payment of previous accounts payable Total budgeted payments for inventory Accounts payable