The following information is from the manufacturing budget and the budgeted fina
ID: 2436856 • Letter: T
Question
The following information is from the manufacturing budget and the budgeted financial statements of Fabor Fabrication.
a. Compute the budgeted amount for purchases of direct materials during the year.
b. Compute the budgeted amount for cash payments during the year to suppliers of materials.
Direct materials inventory, January 1 $ 68,000 Direct materials inventory, December 31 25,000 Direct materials budgeted for use during the year 250,000 Accounts payable to suppliers of materials, January 1 50,000 Accounts payable to suppliers of materials, December 31 79,000
Explanation / Answer
(a)Purchase Budget Particulars $ Direct materials inventory, December 31 25,000 ADD:Direct materials budgeted for use during the year 250,000 LESS:Direct materials inventory, January 1 -68,000 Budgeted Purchases 207,000 (b)Cash Budget Particulars $ Accounts payable to suppliers of materials, January 1 50,000 ADD:Purchases 207000 LESS:Accounts payable to suppliers of materials, December 31 -79000 Amount of cash paid to suppliers 178,000
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.