Jordan, 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	$79,000	$89,000	$99,000	$105,000

Jordan had a beginning inventory balance of $2,800 on April 1 and a beginning balance in accounts payable of $14,900. The company desires to maintain an ending inventory balance equal to 10 percent of the next periods cost of goods sold. Jordan makes all purchases on account. The company pays 70 percent of accounts payable in the month of purchase and the remaining 30 percent in the month following purchase.

Required

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

B) Determine the amount of ending inventory Jordan will report on the end-of-quarter pro forma balance sheet.

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

D) Determine the balance in accounts payable Jordan will report on the end-of-quarter pro forma balance sheet. A.

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

Inventory Purchases Budget	April	May	June
Budgeted cost of goods sold	$79,000	$89,000	$99,000
Plus: Desired ending inventory
Inventory needed	79,000	89,000	99,000
Less: Beginning inventory
Required purchases (on account)	$79,000	$89,000	$99,000

B)

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

Ending inventory

C)

Prepare a schedule of cash payments for inventory for April, May, and June. (Round your final answers to the nearest whole dollar.)

Schedule of Cash Payments	April	May	June
Payment of current accounts payable
Payment of previous accounts payable
Total budgeted payments for inventory	$0	$0	$0

D)

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

Accounts payable