The Sangiovese Trading Company has prepared its first two budgets for the master budget for the quarter ending June 30, 2020. (See Solution, as needed.) Some additional facts:

• The companys balance sheet as of March 31, 2020 shows:

Cash	$ 8,000
Accounts Receivable	20,000
Inventory	36,000
Buildings and Equipment (net)	120,000
Accounts Payable	21,750
Common Stock	150,000
Retained Earnings Sales 62400	12,250

• As a retailer, Sangiovese buys inventory from a supplier. The companys gross margin is 20%
• Each months ending inventory must equal 80% of the following months budgeted cost of goods sold.
• Payments to the companys supplier are made as follows:
  • 50% is paid in the month of purchase.
  • 50% is paid in the month after the purchase.
• The accounts payable at March 31^st are as a result of purchases made in March, 2020.

*Required:

1) Prepare an Inventory Purchases Budget for Sangiovese for the quarter ending June 30, 2020. Show activity by month and in total. (Hint: a quarter = 3 months.)

2) Complete a Schedule of Expected Cash Disbursements for Inventory Purchases for the quarter ending June 30, 2020. Show activity by month and in total.

Previous Data:

Sales Budget
		April		May		June	Quarter
Sales in Units		7,800		9,360		11,700	28,860
Selling price		$10		$10		$10	$10
Sales in Dollars		$ 78,000.00		$ 93,600.00		$ 117,000.00	$ 288,600.00
Schedule of expected cash collections:
		April		May		June	Quarter
Cash sales		$54,600		$65,520		$81,900	$202,020
Credit sales		15,000	*	23,400		28,080	66,480
Total collections		$69,600		$88,920		$109,980	$268,500