Answer:
Peabody, Inc.
a. Inventory Purchase Budget:
April May June
Budgeted cost of goods sold $79,000 $89,000 $99,000
Add Ending Inventory 17,800 19,800 21,000
Cost of Goods Available 4 Sale $96,800 118,800 120,000
Less Beginning Inventory 2,700 17,800 19,80
Purchases $94,100 $101,000 $100,200
b. The amount of Ending Inventory that Peabody will report on the end-of-quarter proforma balance sheet is:
$21,000
c. A Schedule of Cash Payments for Inventory:
April May June
70% in month of purchase 65,870 70,700 70,140
30% in the month following 15,000 28,230 30,300
Total payment $80,870 $98,930 $100,440
d. Balance of the Accounts Payable is:
$30,060
Explanation:
a) Data and Calculations:
1. Cost of Goods Sold Budget:
April May June July
Budgeted cost of goods sold $79,000 $89,000 $99,000 $105,000
Add Ending Inventory 17,800 19,800 21,000
Cost of Goods Available 4 Sale $96,800 118,800 120,000
Less Beginning Inventory 2,700 17,800 19,800 21,000
Purchases $94,100 $101,000 $100,200
Accounts Payable
Beginning balance $15,000 $28,230 $30,300
Purchases $94,100 $101,000 $100,200
Less payment:
70% in month of purchase 65,870 70,700 70,140
30% in the month following 15,000 28,230 30,300
Ending balance $28,230 $30,300 $30,060
