Engage with knowledgeable experts and get accurate answers on IDNLearn.com. Discover the information you need from our experienced professionals who provide accurate and reliable answers to all your questions.

Payne Company provided the following information relevant to its inventory sales and purchases for December 2013 and the first quarter of 2014:

Dec. 2013 Jan. 2014 Feb. 2014 Mar. 2014
(Actual) (Budgeted) (Budgeted) (Budgeted)
Cost of goods sold $80,000 $140,000 $180,000 $120,000

Desired ending inventory levels are 25% of the following month's projected cost of goods sold. The company purchases all inventory on account. January Year 2 budgeted purchases are $180,000. The normal schedule for inventory payments is 60% payment in month of purchase and 40% payment in month following purchase.

Budgeted cash payments for inventory in February 2014 would be: __________



Sagot :

Answer:

$171,000

Explanation:

Purchases in February = ($120,000 * 25%) + ($180,000 -$180,000*25%)

Purchases in February = $30,000 + $135,000

Purchases in February = $165,000

Payment in February = ($180,000 * 40%) + ($165,000 * 60%)

Payment in February = $72,000 + $99,000

Payment in February = $171,000

So, the bdgeted cash payments for inventory in February 2014 will be $171,000.

We appreciate every question and answer you provide. Keep engaging and finding the best solutions. This community is the perfect place to learn and grow together. Your questions find clarity at IDNLearn.com. Thanks for stopping by, and come back for more dependable solutions.