Jasper Fruits Corporation wholesales peaches and oranges. Barbara Jasper is work
ID: 2558291 • Letter: J
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 4 percent for peaches and 9 percent for oranges. The current year’s sales revenue data follow.
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.)
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 $620,000, prepare the company’s budgeted annual income statement.
c. Ms.Jasper estimates next year’s ending inventory will be $36,000 for peaches and $57,000 for oranges. Prepare the company’s inventory purchases budgets for the next year, showing quarterly figures by product.
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.)
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 $620,000, prepare the company’s budgeted annual income statement.
c. Ms.Jasper estimates next year’s ending inventory will be $36,000 for peaches and $57,000 for oranges. Prepare the company’s inventory purchases budgets for the next year, showing quarterly figures by product.
First Second Fourth Quarter Quarter Quarter Quarter Third Total Peaches Oranges Total $234,000 $254,000 $314,000 $254,000 $1,056,000 408,000 458,000 578,000 388,000 ,832,000 $642,000 $712,000 $892,000 $642,000 2,888,000Explanation / Answer
Company's sales budget for the next year for each quarter by Individual product First Quarter Second Quarter Third Quarter Fourth Quarter Total Peaches $243,360.00 $264,160.00 $326,560.00 $264,160.00 $1,098,240.00 Oranges $444,720.00 $499,220.00 $630,020.00 $422,920.00 $1,996,880.00 Total $688,080.00 $763,380.00 $956,580.00 $687,080.00 $3,095,120.00 Company's Budgeted Annual Income statement JASPER FRUITS CORPORATION Budgeted Annual Income statement Sales $3,095,120.00 Less : Cost of goods sold $1,857,072.00 Gross Margin $1,238,048.00 less : Selling and administrative exp. $620,000.00 Net Operating Income $618,048.00 Company's Inventory purchases budget for the next year (Peaches) First Quarter Second Quarter Third Quarter Fourth Quarter Cost of goods sold $146,016.00 $158,496.00 $195,936.00 $158,496.00 Add : Ending Inventory $15,849.60 $19,593.60 $15,849.60 $36,000.00 Inventory needed $161,865.60 $178,089.60 $211,785.60 $194,496.00 Less : Beginning Inventory $14,601.60 $15,849.60 $19,593.60 $15,849.60 Required Purchases (Peaches) $147,264 $162,240 $192,192 $178,646 Company's Inventory purchases budget for the next year (Oranges) First Quarter Second Quarter Third Quarter Fourth Quarter Cost of goods sold $266,832.00 $299,532.00 $378,012.00 $253,752.00 Add : Ending Inventory $29,953.20 $37,801.20 $25,375.20 $57,000.00 Inventory needed $296,785.20 $337,333.20 $403,387.20 $310,752.00 Less : Beginning Inventory $26,683.20 $29,953.20 $37,801.20 $25,375.20 Required Purchases (Oranges) $270,102 $307,380 $365,586 $285,377
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