Determining the amount of expected inventory purchases and cash payments Jakal Company, which sells electric razors, had
Question:
Determining the amount of expected inventory purchases and cash payments Jakal Company, which sells electric razors, had \($280,000\) of cost of goods sold during the month of June. The company projects a 5 percent increase in cost of goods sold during July. The inventory balance as of June 30 is \($30,000\) , and the desired ending inventory balance for July is \($25,000\) . Jakal pays cash to settle 80 percent of its purchases on account during the month of purchase and pays the remaining 20 percent in the month following the purchase. The accounts payable balance as of June 30 was \($32,000\) .
Required
a. Determine the amount of purchases budgeted for July.
b. Determine the amount of cash payments budgeted for inventory purchases in July.
Step by Step Answer:
Survey Of Accounting
ISBN: 9780077503956
1st Edition
Authors: Thomas Edmonds, Philip Olds, Frances McNair, Bor-Yi Tsay