Kingston company has the following budgeted inventory purchases: Kingston pays f

Question

Kingston company has the following budgeted inventory purchases: Kingston pays for inventory purchases as follows: 20% in the month of purchase. 80% in the following month. All of the inventory is purchased from Klepco. Purchases Budget Budgeted cost of goods sold plus desired ending inventory Total needs ess beginning inventory Cost of purchases Total 1312000 105600 1417600 (115200)(148800)(129600)(115200) 080001302400 April 384000 148800 532800 May 496000 129600 625600 June 432000 105600 537600 417600 476800 How much will Kingston pay (in cash) for purchases in June? How much does Kingston owe Klepco at the end of June?

Explanation / Answer

Kingston will Cash pay for purchse in june = (476800*80%+408000*20%) = 463040

Kingston owe Klepco at the end of june = (408000*80%) = 326400

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