Reference: Survey of Accounting 6th edition Book

Problem 14-18A (Algo) Preparing an inventory purchases budget and schedule of cash payments LO 14-3 Franklin, Inc. sells fireworks. The company's 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 $69,000 $79,000 $89,000 $95,000 Franklin had a beginning inventory balance of $3,900 on April 1 and a beginning balance in accounts payable of $14,300. The company desires to maintain an ending inventory balance equal to 15 percent of the next period's cost of goods sold. Franklin 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 a. Prepare an inventory purchases budget for April, May, and June. b. Determine the amount of ending inventory Franklin 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 Franklin will report on the end-of-quarter pro forma balance sheet. Complete this question by entering your answers in the tabs below. Required A Required B Required C Required D Prepare an inventory purchases budget for April, May, and June. Inventory Purchases Budget April May June Budgeted cost of goods sold $ 69,000 $ 79,000 $ 89,000 Plus: Desired ending inventory 11,850 13,350 14,250 Inventory needed 30,850 92,350 03,250 Less: Beginning inventory 11,850 13,350 Required purchases (on account) 80,850 $ 80,500 $ 89,900 Required A Required B References Worksheet Difficulty: 3 Hard Problem 14-18A (Algo) Learning Objective: 14-03 Prepare an Preparing an inventory inventory purchases budget and related purchases budget and schedule of cash payments. schedule of cash payments LO 14-3Problem 14-18A (Algo) Preparing an inventory purchases budget and schedule of cash payments LO 14-3 Franklin, Inc. sells fireworks. The company's 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 $69,000 $79,000 $89,000 $95,000 Franklin had a beginning inventory balance of $3,900 on April 1 and a beginning balance in accounts payable of $14,300. The company desires to maintain an ending inventory balance equal to 15 percent of the next period's cost of goods sold. Franklin 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 a. Prepare an inventory purchases budget for April, May, and June. b. Determine the amount of ending inventory Franklin will report on the end-of-quarter pro forma balance sheet. . Prepare a schedule of cash payments for inventory for April, May, and June. d. Determine the balance in accounts payable Franklin will report on the end-of-quarter pro forma balance sheet. Complete this question by entering your answers in the tabs below. Required A Required B Required C Required D 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 $ O S References Worksheet Difficulty: 3 Hard Problem 14-18A (Algo) Learning Objective: 14-03 Prepare an Preparing an inventory inventory purchases budget and related purchases budget and schedule of cash payments. schedule of cash payments LO 14-3