What would be the required purchases (on account)for December?
A) $47,000
B) $50,000
C) $53,000
D) $60,500

Question

Quizplus · Accepted Answer

Budgeted purchases of inventory purchases = Budgeted cost of goods sold + Desired ending inventory - Beginning inventory
Budgeted purchases of inventory purchases in December = Budgeted cost of goods sold + (Budgeted cost of goods sold in January x 25%)- (Budgeted cost of goods sold in December x 25%)
Budgeted purchases of inventory purchases in February = $50,000 + ($70,000 x 15%)- ($50,000 x 15%)= $50,000 + $10,500 - $7,500 = $53,000

What Would Be the Required Purchases (On Account)for December