Peabody, Inc., sells fireworks. The company's marketing director developed the following cost of goods s budget for April, May, June, and July. May Budgeted cost of goods sold $71,000 $81,000 $91,000 $97,000 Peabody had a beginning inventory balance of $3,900 on April 1 and a beginning balance in accounts payable of $15,600. The company desires to maintain an ending inventory balance equal to 15 percent o the next period's cost of goods sold. Peabody 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 followin purchase. Required a. Prepare an inventory purchases budget for April, May, and June. ntory Purchases Budget April May June s 71,000 81,000 91,000 Budgeted cost of goods sold Inventory needed Required purchases (on account) Determine the amount of ending inventory Peabody will report on the end-of-quarter pro forma balance sheet b. c. Prepare a schedule of cash payments for inventory for April, May, and June. May April Schedule of Cash Payments Payment of current accounts payable Payment of previous accounts payable Required purchases (on account) b. Determine the amount of ending inventory Peabody will report on the end-of-quarter pro forma balance sheet c. Prepare a schedule of cash payments for inventory for Aphi, May, and June. Schedule of Cash Payments April MayJune Payment of current accounts payable Payment of previous accounts payable Total budgeted payments for inventory d. Determine the balance in accounts payable Peabody wil report on the end-of-quarter pro forma balance sheet References eBook & Resources