Free accounting problem answers
Sales in Current Year 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Total
Peaches $220,000 $240,000 $300,000 $240,000 $1,000,000
Oranges 400,000 450,000 570,000 380,000 1,800,000
Total $620,000 $690,000 $870,000 $620,000 $2,800,000
Based on the company's past experience, cost of goods sold is usually 60 percent of sales revenue. Company policy is to keep 10 percent of the next period's estimated cost of goods sold as the current period's ending inventory. (Hint: Use the cost of goods sold for the first quarter to determine the beginning inventory for the first quarter.)
Required
a. Prepare the company's sales budget for the next year for each quarter by individual product.
b. If the selling and administrative expenses are estimated to be $700,000, prepare the company's budgeted annual income statement.
c. Ms. King estimates next year's ending inventory will be $34,000 for peaches and $56,000 for oranges. Prepare the company's inventory purchases budgets for the next year showing quarterly figures by product.
