Judy's Company has a sales budget for next month of $150,000.Cost of goods sold is expected to be 40 percent of sales.All goods are purchased in the month used and paid for in the month following purchase.The beginning inventory of merchandise is $5,000, and an ending inventory of $6,000 is desired.Beginning accounts payable is $38,000.
- How much merchandise inventory will Judy's need to purchase next month?

Question

Quizplus · Accepted Answer

To calculate the merchandise inventory purchases: Desired ending inventory ($6,000) + Cost of goods sold (40% of $150,000 = $60,000) - Beginning inventory ($5,000) = $61,000.

Judy's Company Has a Sales Budget for Next Month of $150,000.Cost