Roman Company, a merchandising firm, has the following sales budget for the coming year.
$$\begin{array} { l r }
\text { Month } & \text { Sales } \
\text { July } & \$ 270,000 \
\text { August } & \$ 288,000 \
\text { September } & \$ 312,000 \
\text { October } & \$ 330,000
\end{array}$$
The sales price per unit is $20; the cost of sales is 60% of sales. Roman keeps inventory equal to 50% of the coming month's budgeted sales requirements. It pays for purchases 35% in the month of purchase and 65% in the month after purchase. Inventory at the beginning of July is $78,000. Accounts Payable on July 1 is $100,750.
Required:
a. Prepare a schedule of purchases, in units and in dollars, for the first three months of the year.
b. Prepare a schedule of cash disbursements on account for the first three months of the year.

Question

Roman Company, a merchandising firm, has the following sales budget for the coming year.
 $$\begin{array} { l r } 
\text { Month } & \text { Sales } \
\text { July } & \$ 270,000 \
\text { August } & \$ 288,000 \
\text { September } & \$ 312,000 \
\text { October } & \$ 330,000
\end{array}$$ 
The sales price per unit is $20; the cost of sales is 60% of sales. Roman keeps inventory equal to 50% of the coming month's budgeted sales requirements. It pays for purchases 35% in the month of purchase and 65% in the month after purchase. Inventory at the beginning of July is $78,000. Accounts Payable on July 1 is $100,750.
Required:
a. Prepare a schedule of purchases, in units and in dollars, for the first three months of the year.
b. Prepare a schedule of cash disbursements on account for the first three months of the year.

Quizplus · Accepted Answer

The Answer of Roman Company, a merchandising firm, has the following sales budget for the coming year.
 $$\begin{array} { l r } 
\text { Month } & \text { Sales } \
\text { July } & \$ 270,000 \
\text { August } & \$ 288,000 \
\text { September } & \$ 312,000 \
\text { October } & \$ 330,000
\end{array}$$ 
The sales price per unit is $20; the cost of sales is 60% of sales. Roman keeps inventory equal to 50% of the coming month's budgeted sales requirements. It pays for purchases 35% in the month of purchase and 65% in the month after purchase. Inventory at the beginning of July is $78,000. Accounts Payable on July 1 is $100,750.
Required:
a. Prepare a schedule of purchases, in units and in dollars, for the first three months of the year.
b. Prepare a schedule of cash disbursements on account for the first three months of the year.

Roman Company, a Merchandising Firm, Has the Following Sales Budget