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 6 percent for peaches and 11 percent for oranges. The current year's sales revenue data follow: Pirst Third Second Quarter Quarter Fourth Qarter Qarter Total Peachers Orangers Total $225,000 $245,000 $305,000 $245,000 $1,020,000 571,000 401,000 4 381,0001,804,000 $626,000 $696,000 $876,000 626,000 $2,824,000 Based on the company's past experience, cost of goods sold is usually 65 percent of sales revenue. Company policy is to keep 20 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 $670,000, prepare the company's budgeted annual income statement. c. Ms Jasper estimates next year's ending inventory will be $34,000 for peaches and $56,500 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 225,000 245,000 305,000 245,000 1,020,000 oranges 401,000 451,000 571,000 381,000 1,804,000 total 626,000 696000 876000 626000 2,824,000 Required B Budgeted Annual income statement sales 2,824,000 less cost of goods sold   65% 1835600 Gross profit 988,400 less:Selling and administrative expense 670,000 Net income 318,400 Required C1 1st qtr 2nd qtr 3rd qtr 4th qtr total Sales 225000 245000 305000 245000 1020000 cost of goods sold 65% 146250 159250 198250 159250 663000 add ending inventory 31850 39650 31850 34000 31850 inventory needed 178100 198900 230100 193250 694850 less beginning inventory 29250 31850 39650 31850 29250 required purchases 148850 167050 190450 161400 665600 Required C2 1st qtr 2nd qtr 3rd qtr 4th qtr total Sales 401000 451000 571000 381000 1804000 cost of goods sold 70% 260650 293150 371150 247650 1172600 add ending inventory 58630 74230 49530 56500 56500 inventory needed 319280 367380 420680 304150 1229100 less beginning inventory 52130 58630 74230 49530 52130 required purchases 267150 308750 346450 254620 1176970

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