Answered

Westonci.ca is your go-to source for answers, with a community ready to provide accurate and timely information. Experience the ease of finding quick and accurate answers to your questions from professionals on our platform. Connect with a community of professionals ready to help you find accurate solutions to your questions quickly and efficiently.

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 :

Tundexi

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.

Thanks for using our platform. We aim to provide accurate and up-to-date answers to all your queries. Come back soon. We hope you found what you were looking for. Feel free to revisit us for more answers and updated information. Discover more at Westonci.ca. Return for the latest expert answers and updates on various topics.