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INTRODUCTION TO MANAGEMENT ACCOUNTING 15E Problem 7-33 A Name Section Andrea Martin Acct 2270 B C D E F G H 5 Data Input Section: Renovation Lighting...

Renovation Lighting Supply plans inventory levels (at cost) at the end of each month as follows: May,
$275,000; June, $220,000; July, $200,000; and August, $240,000.
Sales are expected to be June, $440,000; July, $350,000; and August, $300,000. Cost of goods
sold is 60% of sales.
Purchases in April were $250,000 and in May they were $180,000. Payments for each month’s
purchases are made as follows: 10% during that month, 80% the next month, and the final 10% the
next month.
Prepare budget schedules for June, July, and August for purchases and for disbursements for
purchases.
How do you come up with the figure for the desired ending inventory?
INTRODUCTION TO MANAGEMENT ACCOUNTING 15E Problem 7-33 Name Andrea Martin Section Acct 2270 A B C D E F G H 5 Data Input Section: Renovation Lighting Supply 6 Monthly forecasted inventory levels (at cost): 7 May $275,000 8 June 220,000 9 July 200,000 10 August 240,000 11 Monthly forecasted sales: 12 June $440,000 13 July 350,000 14 August 300,000 15 Cost of goods sold 60% 16 Purchases: 17 April $250,000 18 May 180,000 19 Purchases paid for as follows: 20 Current month 10% 21 First month after purchase 80% 22 Second month after purchase 10% 23 Output Section: 24 Purchases Budget 25 June July August 26 Cost of goods sold $264,000 $210,000 $180,000 27 Plus desired ending inventory Formula 2 Formula 6 Formula 10 28 Total needs 264,000 210,000 180,000 29 Less beginning inventory Formula 3 Formula 7 Formula 11 30 Equals purchases Formula 4 Formula 8 Formula 12 31 32 33 Disbursements for Purchases 34 June July August 35 10% of this month's purchases Formula 13 Formula 16 Formula 19 36 80% of last month's purchases Formula 14 Formula 17 Formula 20 37 10% of second-last month's purchases Formula 15 Formula 18 Formula 21 38 $- $- $- 39 40 End of Problem
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INTRODUCTION TO MANAGEMENT ACCOUNTING 15E Problem 7-33 A Name
Section Andrea Martin
Acct 2270 B
C
D
E
F
G
H
5 Data Input Section:
Renovation Lighting Supply
6 Monthly forecasted inventory levels...

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