Jasper Fruits Corporation wholesales peaches and oranges. Barbara Jasper is work

Question

Jasper Fruits Corporation wholesales peaches and oranges. Barbara Jasper is working with the company's accountant to prepare next year's budget. Ms. Jasper estimates that sales will increase 5 percent for peaches and 10 percent for oranges. The current year's sales revenue data follow: Second Quarter Third Quarter $226,000 $246,000 $306,000 $246,000 $1,024,000 575,000 $631,000 $701,000 881,000 $631,000 $2,844,000 First Quarter Fourth Quarter Total Peaches Oranges Total 405,000 455,000 385,000 1,820,000 Based on the company's past experience, cost of goods sold is usually 7O percent of sales revenue. Company policy is to keep 15 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 $650,000, prepare the company's budgeted annual income statement. c. Ms.Jasper estimates next year's ending inventory will be $35,600 for peaches and $56,800 for oranges. Prepare the company's inventory purchases budgets for the next year, showing quarterly figures by product.

Explanation / Answer

Required A 1st qtr 2nd qtr 3rd qtr 4th qtr total peaches 237,300 258300 321300 258300 1,075,200 oranges 445,500 500500 632500 423500 2,002,000 total 682,800 758800 953800 681800 3,077,200 Required B Budgeted Annual income statement sales 3,077,200 less cost of goods sold   70% 2154040 Gross profit 923,160 less:Selling and administrative expense 650,000 Net income 273,160 Required C1 1st qtr 2nd qtr 3rd qtr 4th qtr total Sales 237300 258300 321300 258300 1075200 cost of goods sold 70% 166110 180810 224910 180810 752640 add ending inventory 27122 33737 27122 35600 35600 inventory needed 193232 214547 252032 216410 788240 less beginning inventory 24917 27122 33737 27122 24917 required purchases 168315 187425 218295 189288 763323 Required C2 1st qtr 2nd qtr 3rd qtr 4th qtr total Sales 445500 500500 632500 423500 2002000 cost of goods sold 70% 311850 350350 442750 296450 1401400 add ending inventory 52553 66413 44468 56800 56800 inventory needed 364403 416763 487218 353250 1458200 less beginning inventory 46778 52553 66413 44468 46778 required purchases 317625 364210 420805 308783 1411423

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