Do It! Review 21-5 Zeller Company estimates that 2017 sales will be $44,600 in q

Question

Do It! Review 21-5

Zeller Company estimates that 2017 sales will be $44,600 in quarter 1, $51,200 in quarter 2, and $64,600 in quarter 3. Cost of goods sold is 50% of sales. Management desires to have ending finished goods inventory equal to 18% of the next quarter’s expected cost of goods sold. Prepare a merchandise purchases budget by quarter for the first 6 months of 2017.

ZELLER COMPANY Merchandise Purchases Budget Quarter Six Months Click if you would like to Show Work for this question: Open Show Work

Explanation / Answer

Answer:-

Estimated sales (a)

$

44600

$ $

51200

Explanation:-1)-

Quarter 2 closing inventory = Cost of goods sold of Quarter 3rd *18%

=$32300*18% =$5814

Cost of goods sold  of Quarter 3rd = Sales of quarter 3rd*50%

=$64600*50% =$32300

2)- Opening inventory of Quater 1 will be 18% of cost of goods sold of thet quarter.

=$22300*18% =$4014

ZELLER Company Merchandise Purchase Budget Quarter Particulars 1 2 Six Months

Estimated sales (a)

$

44600

$ $

51200

Cost of goods sold (b=50%*a) 22300 25600 Add:- Desired ending merchandise inventory (c) 25600*18% = 4608 32300*18%=5814 Less:-Desired opening merchandise inventory (d) 22300*18% =4014 4608 Mechandise to be purchsed (e=b+c-d) 22894 26806 49700

Related Questions

Navigate

• Browse (All)
• Browse D
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.