Problem 2: For the first quarter of 2021, the target sales amount to 500,000 units. For the months of January, February and March, these sales be spread at 25%, 30% and 45% respectively. The cost per unit would be P200. It is the policy of the firm to maintain 20% of the next month's sales as ending inventory of the current month. The beginning balance of the year for inventories and accounts payable are P5,000,000 (25,000 units at P200/unit) and P20,000,000 respectively. The payables are to be fully paid in January. The budgeted sales for April is 240,000 units. Only 20% of payables are paid during the month of purchase with the remaining settled in the month after purchase. Required: February Budgeted cost of sales Targeted ending Inventory balance Required purchases Targeted ending accounts payable balance January 13. 16. 19. 22. 14. . 17. 20. 23 March 15. 18. 21. 24. 2 Supporting Tables: A. Cost of Goods Budget January February March Total E E Cost per Unit Multiplied by: Units to be sold Budgeted Cost of Sales E B B G E C A D F H B. T-Account Analysis for Inventory Inventory January Beginning Balance Budgeted Cost of Sales F M Required Purchase Required Balance February Budgeted Cost of Sales G N Required Purchase Required Balance March Budgeted Cost of Sales H Required Purchase Required Balance o o L Amount estimated to be due on Mar. 31 Total Purchases/ Payable to be Settled March P C. Payment Schedule for Accounts Payable/Purchases Payments during January February From Beginning Accounts Payable P From purchases made in: - January Q R S T - March U Totals w Y February M N o v Z z D. T-Account Analysis for Accounts Payable January Accounts Payable Beginning Balance Budgeted Purchased M M Budgeted Payments w February AB Balance Budgeted Purchased N Budgeted Payments March AC Balance Budgeted Purchased 0 Budgeted Payments Y Balance AD 3