Homework answers / question archive / Company's cost of goods sold is consistently 70% of sales

Company's cost of goods sold is consistently 70% of sales

Accounting

Share With

Company's cost of goods sold is consistently 70% of sales. The company plans ending merchandise inventory for each month equal to 20% of the next month's budgeted cost of goods sold. All merchandise is purchased on credit, and 40% of the purchases made during a month is paid for in that month. Another 35% is paid for during the first month after purchase, and the remaining 25% is paid for during the second month after purchase Expected sales are August (actual). $365.000, September (actua. $390.000 October (estimated). $320,000, and November (estimated) $320,000. Use this information to determine October's expected cash payments for purchases Calculate Monthly Purchases November August September October 5 54 600 5 4800 255 500 273.000 224,000 310,100 317 800 54500 5 310,100 $ 263.2005 Budgeted ending inventory Cost of goods sold (estimated) Required available inventory Budgeted beginning inventory Required purchases 224.000 Print References Calculat Payments Made for Inventory: August Purchases paldies September October After October August purchases September purchases October purchases Purchases s 310.100) 263.2001 0 105 200 92 120 5 39.500 5 131.720 $ 65,800 (29,600) (23 800) 5 92.600 5 105,200 $ Determine Odober's Expected Cash Payments for purchases Odobe's expected cash payments for purchases 5 181.720